Basic Question: How to hardcode income?

[jwa60]

Hi,

I am very new to dynare and macroeconomic simulations in general. Thanks in advance for the support.

I'm hoping to simulate an economy with savings and how income increase, following similar patterns to Life Cycle Hypothesis (LCH), will affect savings. To show income as a similar pattern to LCH, I'm hoping to hardcode the income in different periods.

Unfortunately I don't know how to hardcode and hardcode for different periods. Any support relating to this topic would be greatly appreciated.

Many thanks,
Jwa60

[jpfeifer]

If this is a perfect foresight context, then you can specify income as an exogenous variable.

[jwa60]

If this is a perfect foresight context, then you can specify income as an exogenous variable.

Thank you for your response. It will be perfect foresight and I believe I would need to place a parameter associated with income to reflect the growth and decline over time. I am very new to Dynare and have been playing around. Wondering if I can get an example?

Many thanks,
Jwa60

[jpfeifer]

Simply define income as an exogenous variable and set its trajectory using the shocks block. There you can provide a sequence of values. See e.g. https://github.com/DynareTeam/dynare/blob/master/tests/ramst_vec.mod