Unless I specify the planner’s discount factor to be marginally above the private sector’s discount factor, I run into indeterminacy problems. To get a determinate solution, the planner’s discount factor only needs to be marginally different to the private sector one (e.g. 0.99001 vs. 0.99)
I have experienced this issue with different models.
Is there an explanation for such phenomenon?
Many thanks in advance,
Bianca
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ramsey policy: is there a bug?
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ramsey policy: is there a bug?
by bipaoli » Tue Jul 10, 2012 7:37 pm
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Re: ramsey policy: is there a bug?
by YHS » Sat Jul 14, 2012 1:22 am
I'm running Ramsey policy with Dynare v4.3.0 and don't have the problem you described. Your problem should be model-specific.
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