Description
Hey!
I'm trying to learn how to use the toolbox (very cool, by the way) and I figured that a good way was to get stuff going on by my own.
I'm trying to run a problem in which the heterogeneity is in firm productivity.
Imagine that you have a problem in which the household block is very simple and standard, but firms are subject to exogenous productivity shocks, as well as an aggregate shock.
I'm thinking of a Krusell-Smith model, but changing the heterogeneity from place.
My question, which I think is very silly, but can't wrap my head around, is: looking at the Krusell-Smith notebook, section 2 defines the computation for the household problem, which I would have to translate for the firm. The thing is that, unlike the HH's problem, the firm chooses its price period by period, so how should go about setting the recursive formulation?
Thanks!