Nonstationary variables in dynare

[jpfeifer]

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Nocheck command?

Hi, The nocheck option is generally used in models where you have random walks with drift, ie equations of the form: a_t = \alpha+ a_{t-1}+\varepsilon_t There is no steady state for a, except if \alpha=0 in which case there is an infinity of deterministic steady states. In this situation (where the steady state does not exist) you can provide an arbitrary value for a in the block defining the steadystate or in a steady state file routine. This is safe as long as the elasticities and the rati…