Suppose there are distortionary taxes on capital (Forni, Monteforte and Sessa (2009))

Stochastic simulations
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I’m so sorry for opening a new topic, but me and my group don’t have time. I’m so grateful if someone will answer.
The errors connected with the project (correlated with the prior pdf) are the follower:

  1. For Dynare: Symbol tauk is being treated as if it were a function (i.e., takes an argument that is not an integer).
  2. We don’t know how to elaborate the government budget constraint represented in the page 4 of file (point 1 of the exercise, where there is the budget constraint modified, and in our project we have to modified equation number 13)
  3. We don’t know if we are missing equations (like government spending)

provafinal.mod (2.9 KB)

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\lambda is indicated as a variable and should be defined at steady state! This could solve the problem. Also “phitauy” is not defined!

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See also Transcription of the equation on dynare - #5 by jpfeifer