I have a simple dge model where the government subsidies a part of my firm’s investments such that subsidies makes the profit equal to 0 (subsidies=investments-revenues). So I have subsidies in firm’s program and the government’s budget constraint. Note that subsidies are fixed after the cost minimisation. Investments can be larger than revenues, so profit can be negative for some years. But then the government intervene and gives that additional remuneration to the firm.
In that case, if I resolve the model by hand, subsidies to investments do not appear in the resource constraint. My issus is that the aggregate supply is the sum of gross value added. Don’t subsidies increase the gross value added normally ? I’m bothered not having subsidies in the resource constraint at the end since this is an additional revenue for the firm