Adam [2011] - Government debt and optimal monetary and fiscal
Posted: Wed Jan 22, 2014 12:17 pmHi everyone,
I used the model by Adam [2011] Government debt and optimal monetary and fiscal policy. I want to study the dynamics if government spending is fixed from period 20 on, so basically I start in one steady state and I want to see the transition to the new steady state with lower government spending using the extended path algorithm. However, I am struggling writing this down..any suggestions? The FOCs are different for t<=20 and for t > 20. But how do I solve that using Dynare?
Any help appreciated! Best,
Peter
I used the model by Adam [2011] Government debt and optimal monetary and fiscal policy. I want to study the dynamics if government spending is fixed from period 20 on, so basically I start in one steady state and I want to see the transition to the new steady state with lower government spending using the extended path algorithm. However, I am struggling writing this down..any suggestions? The FOCs are different for t<=20 and for t > 20. But how do I solve that using Dynare?
Any help appreciated! Best,
Peter