Hello all!

When I use the code in Chapter 3 of the User Guide, which is a deterministic case with permanent shock (as in page 26 of the User Guide), I find an interesting thing: when I change the time notation of the .mod file (for example, in the code, I change equation (a) and (b) to (a)-1 and (b)-1), then the simulation results are not the same. For example, the two paths of consumption are:

c c2

0.707986 0.707986

0.708271 0.711416

0.708615 0.711602

0.708941 0.711778

0.709251 0.711945

0.709545 0.712103

0.709825 0.712254

0.71009 0.712397

So, I am confused, with the same model, but just with different time notation of the same equation, we may get different result. I also tried another code, the difference is much bigger than this one.

Why this may happen? Which one of the result is more reliable? What can I do to handle this problem?

Would anyone mind to help me to handle these problems?

Thank you, very much!

Threetom

exap.mod (969 Bytes)