Dynare forums

Hi, I wonder whether it is possible to specify a conditional law of motion in the model session in Dynare. For example, I would like to the law of motion for housing capital as

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H_t+1=(1-delta_h)*H_t+alpha*(Rh_t-Rh_bar)

where alpha>0 if (Rh_t-Rh_bar)>0 and alpha=0 if (Rh_t-Rh_bar)<=0. The idea is that there is not new housing supply if the housing rent Rh is less than its steady state value Rh_bar.

Is it feasible to implement such an idea in Dynare?
Thank you.

Basically, I think this is kind of non-smooth motion of state variable. Anybody have encounter similar problem?

For deterministic simulations using simul, you could rewrite the problem as

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H_t+1=(1-delta_h)*H_t+alpha*max(Rh_t-Rh_bar,0)

which should be equivalent to what you want.