Model with 2 stocks of capital for the representative firm

Stochastic simulations
1

Hi everyone,

I’m working on a model where firms can invest in two different stocks of capital Kd and Kc. I can’t run my model with two equations of accumulation. I refer to this subject: Timing error in model with 2 stocks of capital for the firm. As the total capital stock from the previous period cannot be freely allocated across the two stocks in the current period, I need those two equations.

Thanks a lot.

2

But what exactly is your question?

3

Sorry, my question is : why the rank condition is not verified when i implement two equations of accumulation ?

4

Typically, it’s a timing mistake or a problem in the setup.