Thank you.

My low depreciation rate stems from the fact that I have a growth model hence I am subtracting from the steady state capital depreciation rate the growth rate of my economy.

Here are the equations at BGP,

depreciation rate = (investment/capital stock) - growth rate of the economy

This gives a depreciation rate of 0.025

The rental rate of capital is given at BGP by the following equation,

g is the growth rate of my economy, beta the actualisation rate, delta the depreciation rate and tau k the capital tax.

I have an actualisation rate of 0.983, so it is not that low. I calibrated it from the capital Euler equation and the capital demand.

The rental rate of capital is at 7.9%.

I don’t see how I could change the calibration. What would you recommend?

Thank you again, very helpful.

Best regards

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