investment adjustment cost

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investment adjustment cost

Postby sevgim » Fri Aug 28, 2015 5:17 pm

Hi,
I am trying to build rbc model with investment adjustment cost. First, I stationarized the model and then I found steady states. When i run the model, the residuals does not seem nice and now i am trying to fix them. I think that I got problem in equation 9 and 13 since there is a mistake in equation 7. i do not know how to solve my problem. If anyone gives me some ideas, it would be great. best


Residuals of the static equations:

Equation number 1 : 0
Equation number 2 : 0
Equation number 3 : 0
Equation number 4 : 0
Equation number 5 : 0
Equation number 6 : 0
Equation number 7 : 1.9142
Equation number 8 : 0
Equation number 9 : -0.0087875
Equation number 10 : 0
Equation number 11 : 0
Equation number 12 : 0
Equation number 13 : 0.019839
Equation number 14 : 0
Equation number 15 : 0
Equation number 16 : 0
Equation number 17 : 0
Equation number 18 : 0
Equation number 19 : 0
Equation number 20 : 0
Equation number 21 : 0
Attachments
basic5.mod
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Re: investment adjustment cost

Postby jpfeifer » Mon Aug 31, 2015 8:46 am

Sit down and compute the steady state analytically. Any equation that does not have 0 residuals either has a mistake or your steady state computation for the variables in that equation is wrong.
------------
Johannes Pfeifer
University of Cologne
https://sites.google.com/site/pfeiferecon/
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Joined: Sun Feb 21, 2010 4:02 pm
Location: Cologne, Germany


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