Investment shock

General DSGE Modeling
1

Hi, I must add the investment shock in my model. I have put this in the net investment equation that is

(In=I*ei-(delta*ksi*K(-1));),

where ei is the shock. So, the optimal investment decision became

Q=1+ei*((eta_i/2)*(((In+I_ss)/(In(-1)+I_ss)-1)^2)+eta_i*((In+I_ss)/(In(-1)+I_ss)-1)*((In+I_ss)/(In(-1)+I_ss)))-betta*Lambda(+1)*ei(+1)*(eta_i*((In(+1)+I_ss)/(In+I_ss)-1)*(((In(+1)+I_ss)/(In+I_ss))^2));

and the shock process is the basic AR(1). My aggregate resource constraint is

Y=C+I+G+(eta_i/2)*(((In+I_ss)/(In(-1)+I_ss)-1)^2)*(In+I_ss)+tau*psi*Q*K;

so I also put here the investment shock like

Y=C+I+(ei*(eta_i/2)*(((In+I_ss)/(In(-1)+I_ss)-1)^2)*(In+I_ss))+G+tau*psi*Q*K;

but I have some doubts, is it right??
the entire code is that
shocks.mod (6.9 KB)

2

Please use the \LaTeX-capabilities of the forum to provide the full setup. Just based on the codes it is impossible to say anything,

3

Sorry, I don’t understand your request, could you explain me better what i can do. Thank tou so much.

4

I reckon what @jpfeifer meant was that you can use in-built \LaTeX capabilities of this forum to provide the full details/context of your problem. In this specific case, it perhaps means that you can provide your equations (which you have not) together with codes (which you have). This will help everyone see better and understand what the problem is.

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