varexo_det

varexo_det — declares exogenous deterministic variables in a stochastic model

Synopsis

varexo_det VARIABLE_NAME [[,] VARIABLE_NAME ...] ;

Description

This optional command declares exogenous deterministic variables in a stochastic model. See Conventions for the syntax of VARIABLE_NAME.

It is possible to mix deterministic and stochastic shocks to build models where agents know from the start of the simulation about future exogenous changes. In that case stoch_simul will compute the rational expectation solution adding future information to the state space (nothing is shown in the output of stoch_simul) and forecast will compute a simulation conditional on initial conditions and future information.

varexo_det commands can appear several times in the file and Dynare will concatenate them.

Example

varexo m gov;
varexo_det tau;