Hello!

I am trying to combine a Heterogeneous firm model and a Energy part.

However I met BK condition problem, here’s my bafflement:

- If I use the regular convention of
`K=(1-DELTA)*K(-1)+I`

, and the capital market divided into 2 parts,`Ks`

and`Kp`

, how would I express`K_t = K_s,t + K_p,t`

in model.

`K(-1)=Ks+Kp; ys=F(Ks),ys=F(Kp)`

;

is this a correct method? - The model met BK condition when I used such convention by having 2 forwl_var by 3 explosive root. But, If I use

`K(+1)=(1-DELTA)*K+I(+1)`

,

it works well. What is the difference between

(a)`K=(1-DELTA)*K(-1)+I`

,

(b)`K(+1)=(1-DELTA)*K+I`

,

(c)`K(+1)=(1-DELTA)*K+I(+1)`

- How is the difference of ‘Forward-Looking Variable’ and others in the Dynare process. If I use (b) or (c) and get a answer, what is that? How can it be explained?
- Or the problem is not in the using of ‘K’, but I cannot see where could the mistakes be. Here’s my ‘codezip’, and I been struggled on working on the BK condition problem, the reference of ‘Energy’ is in the pack.

Thanks a lot in advance!

codezip.zip (879.4 KB)