# End of period convention and decision lag

**URL:** <https://forum.dynare.org/t/end-of-period-convention-and-decision-lag/6014>\
**Category:** Replication Attempts\
**Created:** [4 February 2017 19:56 UTC](https://forum.dynare.org/t/end-of-period-convention-and-decision-lag/6014 "2017-02-04T19:56:25Z")\
**Posts on this page:** 1\
**Showing post:** 2

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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:** [5 February 2017 17:14 UTC](https://forum.dynare.org/t/end-of-period-convention-and-decision-lag/6014/2 "2017-02-05T17:14:44Z")

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Actually, from what you describe, I think the law of motion for n should be

```auto
n_t =(1-rho_{t})n_{t-1}+m_{t}
```

You inherit employment n\_{t-1} from the previous period, some matches dissolve based on rho\_t and you get new matches m\_t. This is similar to the law of motion for capital. Alternatively, you could shift the whole equation by 1 period:

```auto
n_{t+1} =(1-rho_{t})n_{t}+m_{t}
```

and use

```auto
predetermined_variables n
```

Regarding the limited information assumption, you need to change the information set of the expectations operator in Dynare. You can use the `EXPECTATION(-2)` operator for that (see the manual). You can see the change in timing in the working paper version at  
[ecb.europa.eu/pub/pdf/scpwps/ecbwp304.pdf?0ea454554115cfcd977fa9cc2bd4b493](https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp304.pdf?0ea454554115cfcd977fa9cc2bd4b493)

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