Hi again,

I would like to ask a question about inducing stationarity to the model. According to Schmitt-Grohe, there are alternative ways to induce stationarity to open economies: debt-elastic interest rate, endogenous discount rate or portfolio adjustment case. I am wondering if it is possible to use both an alternative in a model? That is, can I set up a model where there exist portfolio adjustment costs and debt-elastic interest rate? Would I encounter any problem?

Thank you very much