Transition path from one steady state to another

[jpfeifer]

See my point 3 at

Model consistent paths to the steady-state

In that case, the terminal condition will only indirectly matter for \pi_t^4 via its effect on \pi_t. Yes, that is the point of endval. However, terminal conditions usually only make sense if you have a steady state as the terminal condition. Yes, the mathematical two boundary problem is still well-defined. The economic problem often is not, because the terminal condition of being in steady state will be incorrect if there is insufficient time for the problem to settle back to steady state. You…