varexo_det — declares exogenous deterministic variables in a stochastic model
varexo_det
VARIABLE_NAME
[
,
] [
VARIABLE_NAME
...] ;
This optional command declares exogenous deterministic variables in a stochastic model. See command var 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.