Non-convergence to the steady state

[alfredoMX]

Dear Johannes, thank you for your reply, you´re alwas very helpfull.

After cheking the unit roots in my model and reading the different posts refering to the recurrent concerns about this topic

Exchange rate peg and level irfs

Dear dynare-users, In my model Ive got the change of the nominal exchange rate DS_t as an endogenous variable. I define an exchange rate peg as a policy which sets DS_t=1. My question is, how can I retrieve the level of the exchange ratewithout getting an unit root? Wheb I define exp(DS_t)=exp(S_t- S_t-1) I get the unit root problem… Thanks for the support

Unit root variable in the model

Hi, I’m estimating a DSGE model using Dynare. When I use “steady; check;” command, I find that there is an eigenvalue equal to 1. Does that mean one of the endogenous variables is unit root? How to find that variable? What should I deal with it? Is there any consequence if there is a unit root variable in the model? Thank you, Ji

Model simulation with unit root

Dear SébastienVillemot/Michael, I have searching in the forum for posts about dealing with unit root process in a normal DSGE model, but I was a bit confused: I understand the most appropriate way is to stationarize the model; but it seems putting eg x=x(-1)+iid directly in the model block will also work? Am I right? If so, can i see that a unit root without drift is a special case which dynare can solve without stationarizing the model? I also notice dynare will always give the same steady …

a second question derives… In terms of give a policy recomendation (acording to the IRFs) I can say that, given a shock in my stochastic varible (in this case oil revenues),*the response of the varible of interest ( in this case the government oil savings) sould be a permanent deviation (from the old steady state) to the new level indicated by the IRF. BUT! t**his is not a new value of steady state for the variable of interest *. This new level shown in the IRF could be one out of many posible levels of steady state.Is my understanding that everything is going to depend on the initial conditions. Am I rigth?

Thank you in advance.