Hello,
I have been working on an Over-lapping Generations model with three generations and stochastic shocks.
I have struggled while writing the dynare code because of the timing setup and the fact that I have 3 generations optimising each period. So, I came up with a way to write the Euler equations for generations 1 and 2, which is the following:
code = cbetarho1(R(+1)/(1 + g))*(cxi/c2(+1));
(cxi/c2) = cbetarho2(R(+1)/(1 + g))*(cxi/c3(+1));
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Being c1, c2(+1) and c3(+2) the consumption of generation 1, 2 and 3 in period 0, 1 and 2.
Im worried that my code could not be optimising for the entire time horizon of an agent (3 periods) but instead in a staggered way.
This has been the only way in which I have fulfilled the Blanchard Kahn Conditions.
Thanks beforehand for all the help.