Hello,
I want to simulate the effect of a permanent shift in technology in a RBC-type model. However I want technology to converge gradually to its final steady state value (rather than jumping immediately to it), say in 50 periods.
As far as I understand I should be able to do this by using the structure
shocks ;
var technology ;
periods 1 2 3 4 ......49;
values 1.01 1.02 1.03 1.04 ........ 1.5 ;
end;
after the endvalue block, with a 50 periods long simulation (assuming 50 periods are enough to converge to the new steady state). This translates into a set of instructions in the m file which involve the function set_shocks:
set_shocks(0,1,1,1.01);
set_shocks(0,2,1,1.02);
set_shocks(0,3,1,1.03);
.
.
and so on.
I have to related questions.
1)Whether with the lines above I'm implementing what I desire.
2)Whether the instruction set_shocks(0,2,1,1.02) amounts to say that in period zero I know that the value of the exogenous variable in the second period will be 1.02.
Thanks in advance
Best,
Andrea