Problem with the Policy Function
Posted: Wed Jun 03, 2009 11:01 amHello Dynare Users and Programmers!
It's the first time I use this forum. I am working on my PhD dissertation and I have a problem with my growth model.
I have my static and dynamic equations with the state k in t and t+1.
In order to include the growth rate (k(t+1)/k(t)) I decided to divide all the equation side by side by k(t) and the growth rate (named gk) becomes my state at time t. I don't have any (k(t)/k(t-1)) to get gk at time t-1 and as a result I don't have any partial derivative for the state in my policy function. I try to lag one entire equation but the result did not change? I hope I've been clear...
Any suggestion to overcome the problem? Do you have some references for his? Thank you very much! Best,
Ilaria
It's the first time I use this forum. I am working on my PhD dissertation and I have a problem with my growth model.
I have my static and dynamic equations with the state k in t and t+1.
In order to include the growth rate (k(t+1)/k(t)) I decided to divide all the equation side by side by k(t) and the growth rate (named gk) becomes my state at time t. I don't have any (k(t)/k(t-1)) to get gk at time t-1 and as a result I don't have any partial derivative for the state in my policy function. I try to lag one entire equation but the result did not change? I hope I've been clear...
Any suggestion to overcome the problem? Do you have some references for his? Thank you very much! Best,
Ilaria