How to create Forward-looking dummy equation

[taha92a]

Hi,

I am trying to replicate the results from "Energy and Capital in a New Keynesian Framework" (https://halshs.archives-ouvertes.fr/hal ... 6/document) and get the following error:

STOCHASTIC_SOLVER: Dynare does not solve purely backward models at higher order.
STOCHASTIC_SOLVER: To circumvent this restriction, you can add a forward-looking dummy equation of the form:
STOCHASTIC_SOLVER: junk=0.9*junk(+1);

I am new to Dynare so don't know how to create a forward-looking dummy equation and can't seem to find anything online. Any help on this would be massively appreciated.

Thanks!

[jpfeifer]

Just define a variable

Code: Select all

junk

and add the equation

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junk=0.9*junk(+1);