Dear all,

Just a quick clarification. If a start a perfect foresight simulation from a point different from the steady-state, and include only a few periods (say 20), I should observe a path model consistent in the entire 20 + 2 (initial + final period), right?

For example, the variable \pi^4_t = \pi_t + \pi_{t-1} + \pi_{t-2} + \pi_{t-3} should get to the steady-state ( = 3 in this example) at t = 21 (end value), with \pi_{20}, \pi_{19}, \pi_{18} consistent with \pi_{21} also at the steady-state (= 0.75).

The figures below illustrates that this does not happen, as \pi^4_{21} = 0.75+0.90+0.88+0.93 > 3. Feels like he is not taking into account correctly the number of periods and/or end-values.

Thanks in advance !