adjustment cost function

This forum is closed. You can read the posts but cannot write. We have migrated the forum to a new location where you will have to reset your password.
Forum rules
This forum is closed. You can read the posts but cannot write. We have migrated the forum to a new location (https://forum.dynare.org) where you will have to reset your password.

adjustment cost function

Postby nabilfrance » Sat May 12, 2007 12:26 pm

could you help me to write this equation in dynare, i have made an adjustment cost fucntion like these of baxter and crucini(1993):

Kt+1 = (1-δ)kt + Ф(it/kt)kt

at the steday state;
Ф(it/kt) = i/k
Ф'(it/kt) = 1
and i/k = δ



thanks
[/code][/list]
nabilfrance
 
Posts: 11
Joined: Tue Oct 17, 2006 1:56 pm

Postby MichelJuillard » Tue May 15, 2007 6:10 am

You need to find a cost specification that has the appropriate derivative and other characteristics. A quadratic function should do. You need to find the correct value for the parameters

Best

Michel
MichelJuillard
 
Posts: 680
Joined: Thu Nov 18, 2004 10:51 am


Return to Dynare help

Who is online

Users browsing this forum: Google [Bot] and 6 guests