Dear dynare term, I find the paper said,“We keep the levels of productivity and government expenditure constant at their initial values in our simulations. To compute the transition path from the initial to the terminal steady state, we use the Matlab routines available in Dynare. The model converges to the terminal steady state after 1,000 periods, corresponding to 250 years. The transition path is computed by imposing the initial and terminal values and simultaneously solving a system of nonlinear equations that characterize equilibrium in all periods using a Newton method.” But i don’t know how to do in practice. Could you give me help? Thanks a lot.https://www.bankofcanada.ca/wp-content/uploads/2013/09/wp2013-33.pdf
This is a standard perfect foresight transition exercise. See for example https://github.com/JohannesPfeifer/DSGE_mod/blob/master/Solow_model/Solow_SS_transition.mod
Thank a lot, professor Pfeifer, I am looking your example.
This a little different between the paper and your example. Here in example no shocks, but I said case would be more troubling. The figure in the paper was found in my attach. Please help me. Thanks a lot.
- There is not attachment.
- Shocks can easily be handelt with a