Hi all

I am using ramsey_policy to calculate the optimal policy along a transition path. In particular, my model is deterministic I then want to obtain the optimal transition path (from one steady state to a new one) after a permanent exogenous shock. To illustrate my idea, I use the simple NK model as an example. Suppose an expected permanent increase in labor productivity. I then ask what is the optimal interest rate policy. I use init_val and end_val commands to compute the transition from the old steady state to the new one but unfortunately I cannot get the IRFs (or the graphs of the transition. Also the command simul is not allowed!

“ERROR: A .mod file cannot contain both a simul command and one of {stoch_simul, estimation, osr, ramsey_policy}”

I attached the codes.

nk_ramsey.mod (874 Bytes)