Asymptotic balanced growth path

Dynare help (legacy posts)
1

Dear Experts

I was wondering if Dynare can be used to solve model with asymptotic balanced growth path? For example, Tasso Adamopoulos 2008 RED. I am attaching the paper. In this paper, there are two sectors with different TFP growth rate. The labor allocated to one sector approaches to zero in the limit, but never reaches zero. Thanks a lot in advance!

xuduan

2

I deleted the attached paper because this is copyrighted material that we cannot distribute on this forum.

Concerning your question, Dynare is able to solve any model with a trend, as long as you can stationarize your variables by detrending the model. Also note that since Dynare 4.2, the detrending can be done semi-automatically by Dynare, see dynare.org/DynareWiki/RemovingTrends

I don’t know if this is possible for your specific model: you have to see if you can detrend it such that it is stationary at every period.