Problem on Capital Accumulation and BK condition

[jpfeifer]

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BK condition not satisfied...i'm crazy

This simply means that there is most probably still a timing error. Remember: there is one unique timing of variables in your model. By arbitrarily changing the timing of some variable, you change the eigenvalues and make the model run. But the results will be wrong, because the timing is still not correct. (there is also the slight chance that it is a matter of the parameter values being wrong, but that is quite rare according to my experience). The standard recommendation is: start with a sim…

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Timing of capital in two sector economy

Hello all, I am building a two-sectoral model, and I have a question about the timing of sectoral-capital variables: In my model, T and N are sectors, hence kT is capital in sector T and kN is capital in sector N. Then, I assume that the economy’s aggregate capital is simply: k = kT + kN. However, I assume only one law of motion for aggregate capital such that: k = (1-delta)*k(-1) + i - written in Dynare language. It is clear to me that k is a predetermined variable and should be treated as su…