More eigenvalues (>1) than forward looking variables

[jpfeifer]

@Saurabh

And regarding K_g (and other capital), they depend on last period un-depreciated capital and current (not last) period investment, so they are not predetermined…correct me if I am wrong…

The point about capital being predetermined is that often the production function depends on the beginning of period capital stock, i.e. before today’s investment is realized.
If you have a multi-sector structure,

Timing of capital in two sector economy

Hello all, I am building a two-sectoral model, and I have a question about the timing of sectoral-capital variables: In my model, T and N are sectors, hence kT is capital in sector T and kN is capital in sector N. Then, I assume that the economy’s aggregate capital is simply: k = kT + kN. However, I assume only one law of motion for aggregate capital such that: k = (1-delta)*k(-1) + i - written in Dynare language. It is clear to me that k is a predetermined variable and should be treated as su…

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