I am trying to simulate a deterministic model with a dummy variable (i.e DUM) that switches the fiscal policy from a decifit-rule to a debt-rule, from a certain period onward. i.e.:
The dummy variable, DUM, is declared as an exogenous variable which is set to 1 for the first 100 periods, and then to 0 until steady-state. For this purpose, I am using the shocks block, ie.:
periods 1:100 101:1000;
values 1 0;
However, when simulating it, I can see from the oo_.exo_simul that the variable of the DUM is taking a value of 0.5964 for the first 100 periods and not of 1. Could you explain me why this is?
I am using Dynare version 4.6.1 and I attach the .mod file.
CBO_Deficit_calibrated.mod (6.2 KB)