hi! i 've used the basic CEE2005 model and adding a TFP shock. but there is unexpected rise in the output & the rate of capital return & capital accumulation in the first period.
asking for help! thank you for your time!
here 's the code.
q_cee.mod (7.0 KB)
Given the strange behavior in the first period, I would guess there is a timing problem somewhere.
could it also be steady state problem?
In principle, yes. What is indeed strange is the steady states for the taxes. In a linearized model, all steady states should typically be zero.