Ramsey
Posted: Thu Oct 13, 2011 3:15 amGreetings,
We have coded up a model that is working well with a standard Taylor rule. The model has something like 85 equations, some of which involve many leads and lags. Because of the number of leads and lags in the model, dynare opts to use auxiliary variables. We have a _steadystate.m file that we use in order to compute the steady state in the standard setup (with the Taylor rule). We would like to use the 'ramsey_policy' command in order to compute the Ramsey optimal response to various shocks. However, when we replace 'stoch_simul' with 'ramsey_policy' (and add the definition of the planner discount factor) we receive an error telling us that an index is out of bounds when adding auxiliary variables to the steady state. Can we expect the program to work when using an _steadystate.m file with auxiliary variables? Another question is if we can use the _steadystate.m file from the original model. Should we instead provide initial values.
Best wishes,
Ben
We have coded up a model that is working well with a standard Taylor rule. The model has something like 85 equations, some of which involve many leads and lags. Because of the number of leads and lags in the model, dynare opts to use auxiliary variables. We have a _steadystate.m file that we use in order to compute the steady state in the standard setup (with the Taylor rule). We would like to use the 'ramsey_policy' command in order to compute the Ramsey optimal response to various shocks. However, when we replace 'stoch_simul' with 'ramsey_policy' (and add the definition of the planner discount factor) we receive an error telling us that an index is out of bounds when adding auxiliary variables to the steady state. Can we expect the program to work when using an _steadystate.m file with auxiliary variables? Another question is if we can use the _steadystate.m file from the original model. Should we instead provide initial values.
Best wishes,
Ben