in one model i am trying to put into dynare, i would like to simulate that a structural exogeneous Parameter is changing after 10 periods (=from period 11 on)
In other words, i would like to set the exogeneous interest rate during the first 10 periods at a Level of 1.01 (=1%) and from period 11 on until period 100 to Level 1.04 (=4%)
Could anyone support me with some hints on how to do that ?
Hi, you need to provide more context. Is the change permanent or temporary. Do people know/take into account that the parameter can switch or is it a once and for all change? Is the model stochastic or perfect forsight?
the “Change” Looks as follows: from period 0 till period 10, the structural exogeneous Parameter (here: interest rate) is supposed to be “1.01”, and from period 11 till 100 (end of the Simulation) the same structural exogeneous Parameter is supposed to take the value 1.04. In other words, the structural exogeneous Parameter is temporary low (for the first 10 periods)
There is some tension in your answer. If you do perfect foresight, then agents will know exactly when the parameter will switch. This switch will be perfectly anticipated. Is that what you want?
In any case, it sounds like a straightforward transition exercise. Use initval and endval to set the initial and terminal steady state and a shocks-block to define the parameter change.