%Steady-state values

istar_cal = 2; %assuming r*=0

pistar_cal = 2; %target inflation

%Policy rule

rho_cal = 0.9; %how much of the previous policy rate carries on to the current one

alpha_cal = 1.0; %outlook coefficient

beta_cal = 1; %underlying coefficient

gamma_cal = 0.5; %transmission coefficient

xi_cal = 3; %increase in gamma caused by a large forecast revision

%Inflation outlook

mu0_cal = 1; %importance of forecast divergence from target

phi_cal = 0.25; %threshold to consider revision considerable

%Underlying inflation

lambda_cal = 0.5; %level vs. dynamics effect in underlying (core vs. momentum)

%Transmission mechanism

th0_cal = 0.9; %proportion of strength of past financial tightening on f_t today

th1_cal = 0.1; %proportion of strength of interest-rate regime on f_t today

sg1_cal = 0.9; %strength of past transmission still in the pipeline

sg2_cal = 0.1; %strength of tightening that has already reached financial conditions