Dynamic asset allocation problem

Dear Professor Jpfeifer, I would like to know that there is now a way for Dynare to solve the dynamic asset allocation problem of more than two types of assets? Because I note that the discussion on this issue is still in 2013, I would like to know the latest developments on this issue. Thank you.

Professor Jpfeifer, there is one more question that confuses me. In my model, the household sector holds government bonds and savings. Although I can’t get the optimal allocation of assets, I can still get the steady-state value of government bonds through government budget constraints. However, after running the mod, some variables cannot return to the steady-state value (at 40 periods). I want to know, will this model continue to work? Is this still a DSGE model that reflects real-world problems??

  1. Pure portfolio allocation problems cannot by default be solved in Dynare due to the deterministic steady state being indeterminate.
  2. If the government decides on the supply of bonds, then there is no question of the allocation, just what the price needs to be to clear the market.
  3. You need to check whether your model features a unit root. The check-command should provide the necessary output.