Hello, I’m a graduate student working with DSGE models and dynare for the first time, and I’m having a bit of trouble entering my model,
Bank retained earnings ln(CapIB) depends on its past and expected future values, and is driven by the relative shadow price of bank capital, according to:
ln(CapIB) = 1/(1+beta)*ln(CapIB(-1)) + beta/(1+beta)*ln(CapIB(+1))+…
When entering the model in steady_state_model, it seems that after removing time subscripts, the left-hand term and the two right-hand terms would cancel out 。
ln(CapIB) = 1/(1+beta)*ln(CapIB) + beta/(1+beta)*ln(CapIB)+…
because there are other terms on the right side of the equation. How should such a model be entered in Dynare? Is there a misunderstanding in my comprehension ?
Thank you for your help.