I’m dealing with a capital accumulation equation including capital adjustment cost.
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
Thanks in advance!