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Predetermined variables

PostPosted: Thu Apr 10, 2014 3:51 pm
by francescosat
Hi, I am having many troubles with a 2 country rbc, dsge model.

I was wondering if the problem could be in detecting predetermined variables. I have the following endogenous variables:

-Consumption
-Capital
-Capital renting rate
-Labour
-Bond
-Bond rate
-Technology
-Taxation on consumption, labour and capital

I know that capital is predetermined and I am using dynare convention (capital at time t becomes k(-1)). Can you tell me which of the other variables I wrote are predetermined?

Thanks!

Re: Predetermined variables

PostPosted: Thu Apr 10, 2014 4:48 pm
by jpfeifer
Bonds are typically also predetermined. They are a stock like capital.

Re: Predetermined variables

PostPosted: Thu Apr 10, 2014 4:57 pm
by francescosat
Thanks!

I was wondering if also tax on capital and interest rate on capital renting should be considered as predetermined variables since they refer to capital (that is predetermined).

Re: Predetermined variables

PostPosted: Thu Apr 10, 2014 6:02 pm
by francescosat
p.s. I also have Investment

Re: Predetermined variables

PostPosted: Thu Apr 10, 2014 6:17 pm
by jpfeifer
Taxes are either exogenous or depend on other variables and are not predetermined. The same applies to investment.

Re: Predetermined variables

PostPosted: Thu Apr 10, 2014 8:32 pm
by francescosat
Thank you again! I am reading your papers and I am finding it very useful... T