How to write the equation using occbin

Occbin
1

hi everyone! Thanks to Professor Jpfeifer for patiently answering questions for me every time!

I want to write the following equation in dynare,

st = fs * st(-1) + fk * kt(-1) + ef
fk = 0.07 if kt(-1)<kbar;       0.05 if kt(-1)>=kbar

but I don’t know how to implement it, I think I should use the occbin package to implement it, but I don’t know how to write the code, because I don’t know what the corresponding ‘bind’ and 'relax 'conditions are.

In addition, I uploaded my reference paper.Corresponding to equations 5 and 7 in the article ( page 5-6)
england central bank-a tail of three occasionally binding constraints a modelling approach to gdp at risk.pdf (427.8 KB)

2

Usually, it would be something along the lines of

var klag...;
parameters k_bar... ;

model;
klag=kt(-1);
[name='LOM', bind = 'KBAR']
st = fs * st(-1) + 0.07 * kt(-1) + ef;
[name='LOM', relax = 'KBAR']
st = fs * st(-1) + 0.05 * kt(-1) + ef;
...
end;

occbin_constraints;
name 'KBAR'; bind klag<k_bar; 
end;
3

Thank you very much