How to replicate the results in "The Limited Power of Monetary Policy in a Pandemic", Antoine Lepetit and Cristina Fuentes-Albero, May 2022.

- SOFTWARE, OPERATING SYSTEM
Matlab 2020a
Dynare 4.5.6
Windows 10

- Create a sub-folder "figures" in your workspace.

- FIGURE 1 and 2
Execute "dynare mp_pandemic_zlb.mod" and "dynare mp_pandemic_zlb_cont.mod".
These files contain the baseline version of the model under a Taylor rule and subject to the effective lower bound (ELB).
In mp_pandemic_zlb.mod, the containment policy is not active. In mp_pandemic_zlb_cont.mod, the containment policy is active. 
To generate the figures, run Figure1and2.m.
Expected computation time: a couple minutes.

- FIGURE 3 to 5 and 10 to 12
Execute "dynare mp_pandemic.mod" and "dynare mp_pandemic_cont.mod". 
These files contain a version of the model where, except for shocks, the real interest rate is kept fixed. Other than that, the programs are the same as mp_pandemic_zlb.mod and mp_pandemic_zlb_cont.mod. 
Run irf_mpshock_cont.m. This program calls the file mp_pandemic_cont.m that is generated when executing the mod file of the same name and stores a file Xn_cont_results.mat which contains the impulse response functions to the monetary policy experiments in the case of an active containment policy.
Run irf_mpshock.m. This program calls the file mp_pandemic.m that is generated when executing the mod file of the same name and stores a file Xn_results.mat which contains the impulse response functions to the monetary policy experiments in the case of an inactive containment policy.
To generate figures 3 to 5 and 10 to 12, run Figures3to5and10to12.m. This program reads from the content of Xn_results.mat and Xn_cont_results.mat.
Expected computation time: about 10 min.

- FIGURE 6
Execute "dynare mp_pandemic_zlb_cont.mod", "dynare mp_pandemic_extended2Q_cont.mod", and "dynare mp_pandemic_extended4Q_cont.mod".
- mp_pandemic_zlb_cont.mod contains the baseline version of the model under a Taylor rule, subject to the effective lower bound, and with an active containment policy.
- mp_pandemic_extended2Q.mod and mp_pandemic_extended4Q.mod contain versions of the model where the federal funds rate stays at the effective lower bound for 2 and 4 extra quarters than in the baseline, respectively.
Run Figure6and7.m. It generates three simulations:
- The baseline simulation with monetary policy conducted according to a Taylor rule and subject to the ELB.
- An alternative simulation where the path of the federal funds rate is imposed to be the same as in the baseline simulation from periods 1 to 45 included (date of lift-off in the baseline simulation), kept at the ELB from periods 46 to 71 included, and governed by the model Taylor's rule from period 72 onwards.
- An alternative simulation where the path of the federal funds rate is imposed to be the same as in the baseline simulation from periods 1 to 45 included (date of lift-off in the baseline simulation), kept at the ELB from periods 46 to 97 included, and governed by the model Taylor's rule from period 98 onwards.
Expected computation time: a few minutes.

- FIGURE 7
Execute "dynare mp_pandemic_zlb_cont.mod" and "optimal_lockdown_and_monetary_policy.mod".
- optimal_lockdown_and_monetary_policy.mod contains the version of the model in which lockdown and monetary policies are conducted optimally. 
Run Figure7.m.
Expected computation time: about five minutes. 

- FIGURE 8
Please follow the steps to generate FIGURE 7 before you attempt to generate FIGURE 8. Figure8.m uses as input an output generated by Figure7.m: the optimal lockdown path saved in mu_optimal.mat.
Execute "optimal_monetary_policy.mod". This file contains the version of the model in which monetary policy is conducted optimally and the lockdown path is imposed exogenously.
Run Figure8.m.
Expected computation time: five to ten minutes. 

- FIGURE 9
Execute "dynare mp_pandemic_nozlb_cont".
- optimal_monetary_policy.mod contains a version of the model where monetary policy is conducted according to the baseline Taylor rule, but is not subject to the effective lower bound. The containment policy is active.
Run Figure9.m.
Expected computation time: a couple minutes.