Hi,

model_stickyPricesComplete.mod (9.2 KB)

In the attached 2-country model, you notice that the theoretical means (oo_.mean) are not symmetric across the 2 countries even though the countries are symmetric. For instance, for consumption, there is a slight difference of 0.8081 vs. 0.8076.

This seems to be related to the way I implement the market clearing condition for population. Since the model features migration, one equilibrium condition is that world population is constant and this condition replaces one of the first-order conditions for optimal migration (similar to the bond market clearing condition replacing one of the UIP conditions in an incomplete market model). But depending on which country’s FOC I replace (that is either country H1 or country H2 below), I get that consumption of H1 is 0.8081 or consumption of H2 is 0.8081.

Also: If I remove the market clearing condition for population and keep both countries’ FOCs in, I get NaNs in the theoretical means.

Any thoughts on this?

```
[name='24. Stock of workers']
@#if i == "H1"
@#for j in countries
+Popw@{j}
@#endfor
=0.5*@{N};
@#endif
@#if i != "H1"
Popw@{i} =
@#for j in countries
+exp(gam*((cw@{i}^(1-1/sigma)-1)/(1-1/sigma) - tau@{i}@{j} + beta*V@{i}(+1)-V@{j})) * Popw@{j}(-1)
@#endfor
;
@#endif
```