Hello,everyong. I would like to ask that --is it necessary for an Intermediate Goods firms who aimed to maximize it’s Consumption to have a Price Dispersion?

I find that some DSGE models like:

Do I have to find a Price Dispersion for modeling? I find that i don’t have enough equations to create a dynare program without counting the Price Dispersion.ps. I don’t regard the Restrictions Equation as equations in my program. Do I need to put it in my program?Restrictions Equations like:

Your model needs to consist of exactly as many equations as variables. I don’t really understand your question, but price dispersion results from aggregation over a continuum of intermediate goods producers. It won’t be there if there is only one of them.

Thank u professor jpfeifei!I’m sorry that My english is not good.

Basically, I’d like to know the relationship between the production of enterprise ——Ye,t and the total production——Yt.Because I need to figure out the “market-clearing” condition ——for example, Yt=Ct+It+Ht

But intermediate goods do not appear in the resource constraint describing the final use of goods.

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