Hi there,

I want to use the perfect foresight simulation to obtain the transition path from an initial state (say, 90% of steady state capital stock) to the steady state.

But when I looked at the simulated transitions, it turns out that all variables are fixed at the steady state, regardless of the initial values. There is no transition at all.

There is any clue how I can fix this problem?

I coded the mod file as in

https://github.com/JohannesPfeifer/DSGE_mod/blob/master/Solow_model/Solow_SS_transition.mod.

I solved the steady state in an external m file, so I omitted the endval block. In initval block, I provide initial values of predetermined variables. (I don’t need to provide initial values for all variables, right?)

Is my problem related to the failure of BK condition?

There are my model and steady state file

fymod.mod (4.0 KB) fymod_steadystate.m (5.0 KB) paramfile.m (429 Bytes)

Thanks!

Best,

FY