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Hi all,

I am quite new to Dynare and would appreciate your help.

I am solving a New Keynesian model with Taylor pricing of automatic price reset at the 3rd period. So the steady-state optimal reset price would depend on 2 lagged optimal resets.

In other words I'd like:

Code: Select all

p_star = (3 - p_star(-1)^(1-epsilon)*Pi_bar^(epsilon-1) - p_star(-2)^(1-epsilon)*Pi_bar^(2*(epsilon-1)))^(1/(1-epsilon));

But of course, Dynare is giving me the error "symbol p_star cannot take arguments."

What would be a way around it to have lagged variable in steady state (and also in the model block, but that is not giving me problem yet)

Thank you very much for your help.

BB

I am sorry, but I don't the question. In a steady state all variables are constant, i.e. you are solving a fixed point problem. Thus, the lagged terms should coincide with the current terms.