Dynare forums

I want to confirm how I write the below expression,
mu(t) = beta*E_t{E_t(V(t+1)^(1-alpha))^(alpha/(1-alpha))*V(t+1)^(-alpha)*(r(t+1)+mu(t+1))}

where E_t is the current expectation parameter.

Given that I have defined,
W(t) = E_t(V(t+1)^(1-alpha))

In Dynare,
beta = betta;
alpha = alpa;

Then I can write the expression given at the top in Dynare as,
mu = betta*W^(alp/(1-alp))*V(+1)^(-alp)*(r(+1)+mu(+1))

Is the above expression correct? Thanks for your attention.

Yes it is correct.

Dynare implicitely adds E_t in front of every equation, so the equation you wrote in Dynare is actually equivalent to:

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mu = E_t(betta*W^(alp/(1-alp))*V(+1)^(-alp)*(r(+1)+mu(+1)))


Which is equivalent to what you want (assuming that you also wrote

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W = V(t+1)^(1-alpha)

in your MOD-file).