# Evolution of substitution elasticities

**URL:** <https://forum.dynare.org/t/evolution-of-substitution-elasticities/28340>\
**Category:** Perfect foresight simulations\
**Created:** [15 April 2026 08:14 UTC](https://forum.dynare.org/t/evolution-of-substitution-elasticities/28340 "2026-04-15T08:14:17Z")\
**Posts on this page:** 1\
**Page:** 1

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**Author:** ![hipa](https://forum.dynare.org/letter_avatar_proxy/v4/letter/h/ad7895/32.png) [@hipa](https://forum.dynare.org/u/hipa)\
**Post date:** [15 April 2026 08:14 UTC](https://forum.dynare.org/t/evolution-of-substitution-elasticities/28340/1 "2026-04-15T08:14:17Z")

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Good afternoon,

I am running my model while making the substitution elasticity of a CES nest evolve during 25 years (to reflect structural changes). I do not change the distribution parameters (those are computed at steady state from the value of substitution elasticity and volumes). This causes a lot of instabilities and sometimes it fails to find a perfect foresight solution.

I’ve never come across papers making substitution elasticities evolve through time. I’m guessing that them being deep parameters will inevitably cause numerical instabilities in a dynamic general equilibrium model. For now, because making these parameters evolve dynamically through time makes the model unstable, I mainly run scenarios with different (static) values of this elasticity.

I wondered if the problem I am bumping into is what should be expected or not. Thank you for the help.