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Convergence problems with a two-sector Ramsey model

PostPosted: Fri Mar 25, 2011 3:17 am
by dilyana
I'm simulating a simple deterministic two-sector Ramsey model with a permanent productivity shock in one sector. I obtain full rank but cannot get convergence. Extending the periods and reducing the size of the shock doesn't help. Curiously, a more complicated version of the same model with a BGG-type accelerator works but this doesn't.
I'm attaching the file for reference.

Thanks.