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Steady state description

PostPosted: Fri May 15, 2015 5:57 pm
by Andreia
I'm a master student and I'm having some problems in introducing my model in Dynare. Since i will use the log linearized version of the model computed by Ulhig method I need a steady state version of all the equations. In some of them I need to introduce some variables that are not defined by the model ( AR1 process). So the question is for instance: how to transform a AR1 process into a SS equation? in order to be able to use this variable into others equations. Particularly my model define LP ( private labour) but not LG ( public labour) so i though that the solution is to assume a AR1 process to LG

Thank you

Re: Steady state description

PostPosted: Sun May 17, 2015 5:38 pm
by jpfeifer
For computing steady states, you need to drop the time indices and set shocks to 0. Thus, if
Code: Select all
z=rho*z(-1)+eps;

you get
Code: Select all
z=rho*z;

This can be easily solved to yield
z=0/(1-rho)=0

But I doubt that this helps you to solve for an endogenous variable.