Dear dynare users,
I have a maybe silly question. I want to implement into my model a permanent shock, which implies a jump from an initial steadystate to a new steadystate. So far so good.
However, the new steadystate (endval) induces a new value of the labor disutility parameter \chi^{n} which is necessary to pindown the steadystate value of hours worked.
This implies that I have two different values for this parameter, one in the initial steadystate and another in the final steadystate. However, in the model block, I can only pick/use only one value for this parameter. This leads to the problem that the steadystate cannot be found.
PS: The model works perfectly with a temporary shock.
How can I overcome this problem?
Thanks for your swift reply.

I am modeling a permanent energy price shock and the number of hours worked is not impacted by the new steadystate since it is set to h_{ss} = 0.33. The new permanent price shifts the steadystate of energy usage, which in turn impacts the steadystate value of consumption (through the aggregate budget constraint) and ultimately the value of MUC. Since Uc_{ss} has changed and w_{ss} and h_{ss} remain constant, \chi^{n} has to change in order to pin down \chi^{n} h_{ss}^{\varphi}=w_{ss}Uc_{ss}. Or am I missing something?

Thanks a lot. I did not know that this was possible, and it worked perfectly.
Usually the way to proceed is: you fix h_{ss}^{initial}=0.33 in the initial steady state by setting \chi^n accordingly. Then the shock happens. Because Uc and w change, h_{ss}^{terminal} must also permanently change to satisfy the FOC.
Ok, thanks. That explains why the simulations were so weird.
For now, my strategy to calculate the steadystate was to normalize Y_{ss} to 1 and to calculate the remaining steadystate variables from this point. I guess that I should change this so that all the variables permanently change.
thanks a lot.