Help Investment adjustment cost equation codes in Dynare

[xiuxiu]

Hi, all.
I’m dealing with a capital accumulation equation including capital adjustment cost.

Investment adjustment cost equation codes in Dynare

Hi. I want to enter the codes of investmen Adjustment cost equation in Dynare. Model is not in log-linear form. I do not know how to enter S(It/It-1) and S’(It/It-1) and S"(It/It-1) in Dynare. It is investment in time t. It-1 is investment in time t-1. S’ is the first derivative and S" is the second derivate.

I already checked the previous question and answer, so I found that there is something related between capital adjustment and the elasticity of the investmenr parameter, but still don’t get it.

This might be a dumb question, what’s the relationship between capital adjustment cost and the elasticity of the investment parameter, and how to enter the codes of these in Dynare?

in the model, the technoology of capital producers follows :

elasticity of investment function equals to 5

eta= -phi’‘(i/k)/phi’(i/k)*i/k

Thanks in advance!

[jpfeifer]

Have a look at DSGE_mod/Jermann1998_Algebra.pdf at master · JohannesPfeifer/DSGE_mod · GitHub which shows the computation in Section 5 for a different type of function. You first need the investment FOC to get q.