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As I understand, it is usually common practice, to choose DSGE models in such a way, that the steady-state inflation is freely choose-able and for simplifications it is than usually assumed to be zero....
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### Help with the log-linearization of a difficult term

I'm currently trying to retrace a log-linearization done in this paper. I want to log-linearize around the steady-state, as it is commonly done for DSGE models (see here). $\bar{x_t}$ are steady-state ...
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### Log-linearizing a second order term around the steady-state

I'm currently trying to retrace a log-linearization done in a paper. I want to log-linearize around the steady-state, as it is commonly done for DSGE models (see here) and I want to disregard all ...
325 views

### Solow model with population growth - proof of steady state level of capital per worker

Hello everyone, I am trying to obtain the requested solution as shown in the image (last equation of the image attached), however, after I calculate the law of motion, I only obtain only part of the ...
1 vote
105 views

### The effect of saving rate on steady state

If there is a increase in saving rate and fall back to original level afterwards, what is the effect on steady state in the short run and long run? I am confused about this is because I thought ...
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Given the production function: $$Y = K^\alpha (AL)^\beta R^{1-\alpha -\beta}$$. Where $L, A$ grow at exogenously given rates $n, g$ respectively. $R$ is land and is constant in supply and given that $\... 0 votes 1 answer 60 views ### Steady state equilibrium in Solow model with a convex production function Suppose an economy is producing$e^k$amount of output per capita if it uses$k$amount of capital per capita. As the production function is strictly convex I am thinking the only steady state is at$...
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I'm having trouble with the steady-state savings rate type of problems. Here is the problem I'm stuck on: The production is $Y = 0.5*K^{1/3}(AN)^{2/3}$. If savings is $s$%, what are the steady-state ...
40 views

### Get empirical steady state moments for calibrating a DSGE model

I want to calibrate some parameters of my DSGE model so that in the steady state some variable ratios, that are present in data, are met. My question is, how do I get such ratios from time series ...
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### Derive the Demographic Structure in the Steady State

I am reading a paper with following description on the demographics in their model: "... each (representative) agent lives for $T$ periods ... We assume that each individual has $e^{f}$ children ...
131 views

Consider the growth model with inelastic labor supply, full depreciation, log utility and CRS technology with the Bellman equation be defined as follows: $$V(k)=\max(log(k^\alpha-k')+\beta V(k'))$$ st ...
1 vote
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### Problem to find steady state when I assume Y=1

I am trying to do a DSGE model in Matlab, I have all the steady state equations on paper and pencil but I fail to find values for all variables. Indeed, since I have constant return to scale, I have ...
1 vote
55 views

### Constant to the power of t in steady state

I am wondering how to get the steady-state for the following Euler equation. I know that we can get rid of time in subscripts. However, here I have a constant (a) to the power of $t$. Does anyone know ...
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### An Optimal Control Model: A Ridiculous Result for a Steady State

I was experimenting with a seemingly simple optimal control problem that generates a system of differential equations. When I calculate the values of the steady state of the system I get some very ...
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696 views

### Taylor Series Approximation around steady state in Solow

In my Advanced Macro script, the professor says take TSA1 of the following equation: $(1+g)(1+n)k_{t+1} = sk^\alpha_{t+1} + (1-\delta)k_t$ where $g$ is technological progress, $n$ population growth, ...
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### Solution Method for Infinite-Horizon Maximization Problem

Full disclosure: this problem was part of a final exam that none of our class could really solve definitively. Below the general form is a specific utility function we worked with that I'll try to ...
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my lecturer is doing a rather poor job explaining what he's written down, so I'm wondering if someone would be able to explain the following graph for me? This is a part of the Solow-Swann Growth ...
443 views