almost a unit root
Posted: Thu Aug 07, 2014 12:52 pm
Hi,
I am working on a monetary union model and found 2 eigenvalues which are very close to one (printed as 1 they are actually 0.99999).
The rank condition is otherwise satisfied are there is capital depreciation and debt premia (as in Schmitt Grohe and Uribe).
I wonder whether I can trust that the model returns to SS (in a few hundred iterations) or wheter this eignevalue could be real ones found slightly smaller due to numerical computations.
Best regards,
Aurélien Poissonnier
I am working on a monetary union model and found 2 eigenvalues which are very close to one (printed as 1 they are actually 0.99999).
The rank condition is otherwise satisfied are there is capital depreciation and debt premia (as in Schmitt Grohe and Uribe).
I wonder whether I can trust that the model returns to SS (in a few hundred iterations) or wheter this eignevalue could be real ones found slightly smaller due to numerical computations.
Best regards,
Aurélien Poissonnier