Hello everyone,
I am trying to obtain the steady state of a non-stationary RBC model displaying BGP (only the TFP grows in the model). In your useful code on the non-stationary Solow model, you Professor @jpfeifer obtain a transition to BGP from an arbitrary point with a non-steady-state level of capital, as far as I understand.
Would it be possible to simply obtain a series of steady state values (variables growing a the rate of TFP for all the variables in Dynare, rather than a transition from an arbitrary point to the steady state?
Also, since I have to do the same exercise in a large model, I don’t know how to handle this task in auxiliary files for steady-state computation.
Attached is the code where I find to obtain these values in a perfect foresight exercise, but I am not sure if this is the correct approach.
Thank you.
rbc_trend.mod (824 Bytes)
rbc_trend_steadystate.m (1.0 KB)
findssrbc_trend.m (349 Bytes)
What exactly are you trying to do? The way a steady state is conceptualized in Dynare means it is conditional on the exogenous variables. In your example, it should be straightforward to compute the steady state analytically for any given value of ab.
Yes, for sure. I am trying to embed BGP in a stationary RBC model basically, in order to obtain a series of steady state values for each variable, which are not constant by definition in case of BGP.
I am wondering how to do this in dynare; the previous code just provide me a series for TFP (growing at g); how I can obtain something similar for each aggregate variable of the model?
Thank for your reply professor.
But why are you doing this? In exogenous growth models where you know the trend growth rate, it is easier to work with a detrended model and simply add back the trend.
there is no particular reason, it is just an exercise I impose to myself to understand the functioning of trends and how to handle them in dynare. Do you have material suggesting how to add the trend back?
I might figure out how it works theoretically, but I don’t know how to do it in dynare.
Thank you
I tried to program an example:
Ramsey_Cass_Koopmans_trend_var.mod (5.5 KB)
Thank you so much professor.