Are there methods to enter the steady state other than using the initval commands

Dear Professor,

I’ve learn using the initval commands to enter the steady state even if the steady state is calculated on my own, while today I found a replication code using the form #zz to introduce the steady state. I’m really confused about how it work. Is the “#” form an another way to introduce the steady state?fbc1.mod (10.6 KB)
Thank you for your time. Have a nice day.


Dear Catherine,

That is simply the way Iacoviello uses to introduce the steady-state levels of the variables as model-local variables in the model. For instance, since the external portfolio adjustment costs and capital adjustment costs that feature in his model depend on the deviation from the steady-state levels of deposits, loans, and capital stock, he analytically derives the level of these variables in steady-state and introduces them in the model via model-local variables (i.e. using the \# sign) to be able to compute the adjustment costs in the dynamics. :slight_smile:

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Thank you so much for your detailed and accurate explanation. Now I can understand each part of the code. Thanks again, and have a good day.

That is exactly a perfect material for me to have a better understanding of dynare!! Thank you for your help. :smile: