Defined parameters

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Defined parameters

Postby Enthusiast » Fri Nov 21, 2014 10:41 pm

Could defined parameters be a function of some endogenous variable?
Generally, according to my understanding defined parameters should be a function of other parameters. However, if I transformed a parameter to an endogenous variable, how should I define the other parameters?
So, the question is, is it possible to have an endogenous variable in the equations for some parameters?

Thanks a lot in advance :)
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Re: Defined parameters

Postby jpfeifer » Sat Nov 22, 2014 8:41 am

The answer is yes and no. Anything that is not time invariant is not a parameter. Thus, if a "parameter" depends on other variables, it will be time-varying and becomes a variable. All other "parameters" depending on this variable will also be variables.
But in general, there is no problem with replacing parameters by variables. You just need to define them as such.
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Johannes Pfeifer
University of Cologne
https://sites.google.com/site/pfeiferecon/
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Re: Defined parameters

Postby Enthusiast » Sun Nov 23, 2014 2:06 pm

Thanks a lot!
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