The mod-file ``` @#define predet=1 var K q; @#if predet predetermined_variables K; @#endif parameters a b delta r alpha dt K_inf q_inf; a=1; b=1; delta = 0.023; alpha = 0.33; r = 0.01; dt=1; q_inf = 1+(1+a)*b*delta^a; K_inf = (((r+delta)*q_inf-a*b*delta^(a+1))/alpha)^(1/(alpha-1)); @#if predet==0 // Model block without predetermined_variables statement model; # I = K(-1)*((q-1)/((1+a)*b))^(1/a); # w = alpha*K(-1)^(alpha-1)+a*b*(I/K(-1))^(a+1); K = K(-1) + (I-delta*K(-1))*dt; q(+1) = q + (r+delta)*q*dt - w*dt; end; @#else // Model block with predetermined_variables statement model; # I = K*((q-1)/((1+a)*b))^(1/a); # w = alpha*K^(alpha-1)+a*b*(I/K)^(a+1); K(+1) = K + (I-delta*K)*dt; q(+1) = q + (r+delta)*q*dt - w*dt; end; @#endif steady_state_model; K = K_inf; q = q_inf; end; initval; K = 20; q = q_inf; end; endval; K = K_inf; q = q_inf1; end; check; simul(periods=100, tolx=1e-12, tolf=1e-12, no_homotopy); # I = K*((q-1)/((1+a)*b))^(1/a); # w = alpha*K^(alpha-1)+a*b*(I/K)^(a+1); K(+1) = K + (I-delta*K)*dt; rplot K; rplot q; ``` yields wrong results. The relevant parts of the dynamic file corresponding to ``` # I = K*((q-1)/((1+a)*b))^(1/a); K(+1) = K + (I-delta*K)*dt; ``` are ``` I__ = y(2)*((y(3)-1)/((1+params(1))*params(2)))^(1/params(1)); lhs =y(2); rhs =y(1)+params(6)*(I__-params(3)*y(1)); ``` Here, `y(1)` stores `K` and `y(2)` stores `K(+1)`. As can be seen, in the created model-local variable, the capital stock is not shifted backwards, despite the `predetermined_variables` statement. Upon fixing this, we should turn the file into a unit test.