%readme.txt
%Replication materials for: 
``What Do Long Data Tell Us About the Permanent Component of Inflation?''
%© Stephanie Schmitt-Grohé and Martín Uribe, AERPP 2024, January 8, 2024. 

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Note. Replication is coded in 
MATLAB Version: 9.12.0.2009381 (R2022a) Update 4
Operating System: Microsoft Windows 10 Pro for Workstations Version 10.0 (Build 19045)
Java Version: Java 1.8.0_202-b08 with Oracle Corporation Java HotSpot(TM) 64-Bit Server VM mixed mode
MATLAB                                                Version 9.12        (R2022a)
Datafeed Toolbox                                      Version 6.2         (R2022a)
Econometrics Toolbox                                  Version 6.0         (R2022a)
Financial Instruments Toolbox                         Version 3.4         (R2022a)
Financial Toolbox                                     Version 6.3         (R2022a)
Global Optimization Toolbox                           Version 4.7         (R2022a)
Optimization Toolbox                                  Version 9.3         (R2022a)
Parallel Computing Toolbox                            Version 7.6         (R2022a)
Statistics and Machine Learning Toolbox               Version 12.3        (R2022a)
Symbolic Math Toolbox                                 Version 9.1         (R2022a)
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Preliminaries:
First run: 
data_1900_2022.m in the directory data_2022
Thereafter run: 
run_bayes.m in the directory 1900_2022 (takes 20 hours)
run_bayes.m in the directory 1955_2022 (takes 14 hours)
run_bayes.m in the directory tbreak_measurement_error (takes 20 hours)
(these 3 run_bayes.m programs can be run at the same time)
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The scripts to replicate figures are: 

Figure 1
plot_xm.m in the directory 1900_2022

Figure 2
plot_xm.m in the directory 1955_2022

Model with heteroskedasticity in measurement errors: 
plot_xm.m in the directory tbreak_measurement_error


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