Deal all,
I know that in Dynare all decisions are made after the current period’s shock. So I was wondering if it is possible that I make some variables decided before the certain shock occurs, and the rest of variables decided after the shock in Dynare? If there is a way, how could I achieve it?
Thanks a lot!
What you describe is exactly the definition of a predetermined variable. This is reflected in the timing assumption. For example, the typical production function reads
y=k(-1)^alpha*l^(1-alpha)
where the k(-1) indicates that capital today cannot be chosen based on the current shock realizations.
[quote=“jpfeifer”]What you describe is exactly the definition of a predetermined variable. This is reflected in the timing assumption. For example, the typical production function reads
y=k(-1)^alpha*l^(1-alpha)
where the k(-1) indicates that capital today cannot be chosen based on the current shock realizations.[/quote]
Ah! I got it! Thanks so much!