growth of variables and unit root
Posted: Wed May 15, 2013 6:26 amHi Dynare guys,
I need to add the growth of some variables such as (x dot t)= (xt) - (xt-1) into my model but this creates the unit root problem and taking a long time for the variables to get back to the steady state. Does anyone know how to deal with this?! (I give a zero initial value for all the variables).
Any help would be appreciated.
Cheers
I need to add the growth of some variables such as (x dot t)= (xt) - (xt-1) into my model but this creates the unit root problem and taking a long time for the variables to get back to the steady state. Does anyone know how to deal with this?! (I give a zero initial value for all the variables).
Any help would be appreciated.
Cheers