# Conditional equations

**URL:** <https://forum.dynare.org/t/conditional-equations/19247>\
**Category:** General DSGE Modeling\
**Created:** [4 November 2021 15:01 UTC](https://forum.dynare.org/t/conditional-equations/19247 "2021-11-04T15:01:10Z")\
**Posts on this page:** 1\
**Showing post:** 6

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [7 November 2021 08:55 UTC](https://forum.dynare.org/t/conditional-equations/19247/6 "2021-11-07T08:55:02Z")

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1. There is the original paper at [https://www.sciencedirect.com/science/article/abs/pii/S0304393214001238](https://www.sciencedirect.com/science/article/abs/pii/S0304393214001238)
2. In the deterministic model, Dynare will solve the model nonlinearly. Here the max operator is fine.
3. An alternative to the hard constraint in a stochastic model could be a penalty function. See

> [@The Jacobian contains NaNs](https://forum.dynare.org/t/the-jacobian-contains-nans/5301/8):
>
> Using a penalty function to embed a non-negativity constraint can be done. You might want to take a look at e.g. Kim/Kollmann/Kim (2010) Solving the incomplete market model with aggregate uncertainty using a perturbation method) or [dynare.org/wp-repo/dynarewp027.pdf](http://www.dynare.org/wp-repo/dynarewp027.pdf)

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