KIMOD 2.0 Documentation of changes in the model from January 2007 to January 2009

KIMOD is a model in constant progress. Since the first documentation of KIMOD in January 2007, the model in use has changed gradually. It’s now time to introduce the second version of the model – KIMOD 2.0. As time passes, new data and new judgement causes parametric changes. In chapter 1, some news in the calibration of steady state is discussed. Moreover, we have also introduced a new parameterisation concerning the time it takes for the individuals to recognize and internalize permanent shocks into their behaviour. This is shown in chapter 2. Changes in the model changes the dynamic properties. Threfore, in chapter 3, we compare the impulse-response functions of KIMOD 2.0 and KIMOD 1.0 for five permanent and five temporary shocks.