Difficulty with replicating Greenwood,Hercowitz and Krusell(2000)

General DSGE Modeling Replication Attempts
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  1. You either use initval or a steady_state_model-block. However, your steady_state_model-block is not correct. You do not assign a steady state for a single variable, but rather only set things like css which do not even appear in the model.
  2. Adjustment costs are usually 0 in steady state.
  3. What exactly is the problem with utilization? Usually, there is a condition that a particular parameter ensures it is 1 in steady state.
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Thank you, Prof.Pfeifer,

  1. Should steady state variables in steady_state_modelappear in the original way like c,ke,ks ? I used css to represent c in steady state, the others appear in the same way.
  2. So in the model part, I should input the detrended equilibrium equations with adjustment costs, and in the steady_state_model part i just use the steady state equations right?
    Is it possible to erase lambda, re, rs, w by plugging into other equations? Or must I keep them?
  3. The original paper only gave the value of b*h^\omega, but I do need b in the parameters part, because h appear independently in the model part. So I used h=1 to calculate b=0.2, is it what you meant?
    When I solved out the analytical equations, I have a problem with transforming them into dynare.
    Many thanks,
    Best regards,
    Enkai
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  1. Have a look at https://github.com/JohannesPfeifer/DSGE_mod/tree/master/RBC_baseline
  2. Yes, the dynamic model equations belong in the model-block and only the static steady state equations need to be solved for the steady_state_model-block.
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