growth of variables and unit root

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growth of variables and unit root

Postby tomnilson40 » Wed May 15, 2013 6:26 am

Hi 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
tomnilson40
 
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