Quick Question about simulation of Basu and Bundick (2017)


I have a simple questions, just to be sure, about the replication of Basu and Bundick (2017) paper.

After solving the model in dynare with


if i set the capital share from 0.3 to 0.5 as

set_param_value(‘alpha’,0.5 );

and then simulate the model

will Ysimul give me the stoch steady state when alpha is 0.5 or i need to fix the value of alpha to 0.5 in beginning before



That would give you wrong results, because the decision rules oo_.dr you would be feeding in have not been recomputed. You would need a call to resol or stoch_simul first.