RBC model: steady-state derivations and implementation in Dynare (with preprocessing tips)
How to compute the steady-state of the RBC model both analytically and numerically, with preprocessing tips.
This video is part of a series of videos on the baseline Real Business Cycle model and its implementation in Dynare. We focus on computing the steady-state both analytically and numerically. First, we derive the steady-state using pen and paper and then implement this using either an initval or steady_state_model block in Dynare. We also cover “helper functions” that introduce numerical optimization in an otherwise analytical steady_state_model block, in order to compute the steady-state for variables for which we cannot derive closed-form expressions by hand.
Video
VIDEO
Timestamps
Theory
01:44 - What is a steady-state?
02:54 - Derivation of steady-state expressions using pen and paper
10:21 - Summary of steady-state recipe
Dynare Implementation
11:06 - Getting ready
13:37 - Initval block
16:20 - steady command
18:00 - Create macro variable for either initval or steady_state_model block
19:06 - steady_state_model block if you have closed-form expressions for all variables (log utility case)
20:22 - steady-state computation error for CES utility
21:04 - steady_state_model block if you have closed-form expressions for some but not all variables (CES utility case), using a helper function
Dynare Preprocessor
23:18 - Name tags for model equations
24:58 - write_latex_steady_state_model
Outro & References
25:54 - Outro
27:02 - References
Slides and notes
Codes
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