Endogenous Growth Models

[SS78]

Hi All,
I was wondering if it is possible to solve endogenous growth models using Dynare. As I understand, to solve a system in Dynare, the system needs to converge to its new steady state in finite time (to be specified using endval). I am not sure how to handle this for an endogenous growth model. Any suggestion would be welcome.
Thanks.

[MichelJuillard]

Yes, it is possible. For deterministic models, the trick is to use only stationary variables in t+1 (If y_t is I(1), you can always write y_{t+1} as y_t+dy_{t+1}, where dy_t= y_t-y_{t-1}).
Of course, you need to know the value of dy_t at the final equilibrium.

If you provide the model, I will show you how to do it.

Kind regards

Michel

[SS78]

Yes, it is possible. For deterministic models, the trick is to use only stationary variables in t+1 (If y_t is I(1), you can always write y_{t+1} as y_t+dy_{t+1}, where dy_t= y_t-y_{t-1}).
Of course, you need to know the value of dy_t at the final equilibrium.

If you provide the model, I will show you how to do it.

Kind regards

Michel

Thanks Michel. I do not have the model completed yet. I should be done with that in a few days. I will email you the file for your help once I have set up the model. Thanks.

[makota]

Does anyone have an example on how to do this?

Thanks.