How to add inequality constraints in dynare model

Occbin
1

Dear Professor Pfeifer,

Two of lagrange multipliers (mu and xi) in my model are also recognised as variables, which should be positive. I am wondering whether it is possible to add such inequalities(mu>0, xi>0) into the model section in dynare? They are not parameters, but variables. Currently, my results always generates negative values of these two variables at steady state, which is not what my model hopes.

Many thanks for your help!

Regards,
Claire

2

In that case, you have a model with occasionally binding constraints. With perturbation, there is no way to do this. You may want to use Occbin (which will be part of Dynare 4.7)