Dear dynare team, I have some questions about timing conventions. The stock variables like capital entering the system is easily to understand, but I do not know the following situation how to deal with:
At the period t , the entrepreneur would purchase the capital by net worth and bank’s loan, and the balance sheet is (see the attach), and the loan rate is r_{t+1}. I want to know how to input the loan, net worth and loan rate into dynare, are these same with the stock variables like capital, how to deal with the “end of period!” variables like this? Thanks a lot. 21|318x64
That question is impossible to answer in general. One would need to know more about the structure of the model. The guiding principle is that variables the the timing at which they are decided. So ask yourself, can the net worth in your equation be changed at time t? Or only next period?
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