The code depicts the responses of inflation, output, real and nominal interest-rate given a simple New Keynesian model with sticky prices and an exogenous growth rate of money supply setting as a monetary policy shock.
Base on: Galí, Jordi (2003). “New Perspective on Monetary Policy, Inflation and the Bussiness Cycle” in M. Dewatripoint, L. Hansen, and S. Turnovsky, eds., Advances in Economics and Econometrics, vol. 3, 151-197, Cambridge University Press, Cambridge.