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I'd appreciate if someone could help me with a simple doubt. Government debt, B(t) is a predetermined variable. Accordingly, I have to write this variable with a one period lag in the file.mod, as B(t-1).

Nevertheless, if b(t) is the debt-to-GDP ratio, defined as b(t)= B(t)/Y(t-1), should I write b(t-1) in the dynare code or b(t)?

Thank you

If it's the share relative to past GDP as you write, then it is still predetermined, because past output cannot be changed anymore at time t. In this case it should be b(-1).

jpfeifer wrote:If it's the share relative to past GDP as you write, then it is still predetermined, because past output cannot be changed anymore at time t. In this case it should be b(-1).

Thank you very much jpfeifer for your quick response!