Timing conventions

Dynare help (legacy posts)
1

Hi all,
I am running a simple model and I have two questions.

  1. What is the difference between stating

I know one means it holds at any time, and the other hold at expectation. Beyond that what does it really mean? can I use either one if both work ?

  1. The equation above expressed at (t+1) is the FIRST FOC from a maximization problem. The SECOND FOC is

The question now is can I use the FIRST FOC hold at (t) and the SECOND FOC hold at (t+1) ?? …as:

would I be violating any rules by doing so ?
Ps. ( The reason I do so is that using both at (t+1) in a separate context the BK conditions fail ).

2

The first one means that the equation has to hold for every state of the world, while the second one means it only has to hold on average. That is a fundamental difference. Therefore you cannot use an arbitrary timing. There is a unique correct one you need to find. It is not valid to fudge the timing until the BK conditions are satisfied. As I said, there is one unique correct timing.

3

I assumed so. thank you !