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DSGE user guide

PostPosted: Wed Mar 02, 2016 12:31 am
by monsoon
In the Dynare DSGE User guide, Can anyone please explain to me, how the equation on marginal cost and the subsequent two equations on wage and rental rate of capital on page 14 has been derived. It is not very clear from the text.

Thanks

Re: DSGE user guide

PostPosted: Wed Mar 02, 2016 10:23 am
by jpfeifer
From the profit maximization problem of the firm. The marginal cost is the multiplier on the constraint. Take a look at e.g. Walsh's textbook.