Dear all,

I am currently working on a model where some of the parameters that I want to estimate are present in the steady states of certain variables. Luckily, I have closed-form solutions for all the steady states as a function of these parameters. My question is: is it enough to write the steady states of these variables as a function of the parameters in the steady_state_model block? Or should I additionally create a steady_state .m file? In other words, as long as I declare my steady states as a function of estimated parameters in the steady_state_model block, is this enough to make sure that at each iteration the steady state is modified according to the estimated parameters?

Thank you very much in advance!

Yes. The `steady_state_model`

-block will create the necessary `steady_state2.m`

-file.

Dear professor Pfeifer, thank you very much for your response!

Dear professor Pfeifer, I just have one last question. Imagine that I have a parameter in my model \bar{b}, that determines the debt elasticity of the interest rate (as in the RBC models by e.g. Uribe and Yue). We know that in steady state, b_t is equal to \bar{b}. Hence, we can recover the steady state debt level \bar{b} as a linear function of the steady state trade balance, \bar{TB}. The steady-state trade balance, however, depends on the parameters that I am trying to estimate. Hence, one parameter from the model, \bar{b}, depends on the steady-state level of another variable, \bar{TB}, which indeed depends on a parameter that I am trying to estimate. Is it possible to do this by creating a steady-state file? Because it is not very straightforward to define at the very beginning of the code a parameter value with a steady state value that depends on an estimated parameter. Thank you very much in advance!

Yes, that is one of the standard cases where you need such a file.

Dear professor Pfeifer, many thanks for your fast reply. Do you happen to know about the existence of such a file? Likewise, do you think it is feasible to write such a routine?

Many thanks for everything

What exactly are you looking for? DSGE_mod/Jermann_Quadrini_2012_RBC_steadystate.m at master · JohannesPfeifer/DSGE_mod · GitHub is an involved example that calibrates parameters to a target.