BK condition, predetermined variable

Stochastic simulations
1

Hello everyone,

I would like a clarification. The attached code for an e-dsge model returns the IRF only if x is declared among the pre-determined variables, just like sector-specific capital; though, it shouldn’t be a pre-determined variable according to the timing of its equation x_{t}=\delta_{x}x_{t-1}+em_{t}+em^{row}, am I right? Why do I see such behaviour?
dsge_pollution.mod (4.8 KB)

Thanks for the support

2

Declaring x as predetermined seems wrong given the equation you state. Typically that is sign that there is a different timing error in the model somewhere else.

3

Since the model is quite simple and I can’t spot any timing error, could it be an issue related to calibration?

4

Yes, that could also be the case but is less common.