Hi everybody,
I am simulating the perfect foresight response of the economy to an anticipated carbon tax in Dynare.
The issue is that if I set the carbon tax value in the endval block, the tax assumes the ‘endval;’ value from period 2 onwards. How can I embed a non-constant tax schedule that increases over time in the exo_simul matrix?
I was thinking of specifying a shock vector in the .mod file and using it in the shocks block, though since I have to give a precise value to each element of the shock vector, it could be infeasible to do in the .mod file, as I am dealing with 1000-time periods tax schedule.
I would really appreciate any suggestions.
Thank you!