Behavior of capital

We consider a general model with structural changes including both non-aggregate and

aggregate models.

We keep index numbers to indM1 and indM2 together with state number vector sind

for the case with a single break. Then we set

k1=k[indM1[.,sind[t+1]]] for the first group

and

k1=k[indM2[.,sind[t+1]]] for the second group.

If we have two breaks, we will have

k1=k[indM3[.,sind[t+1]]] for the last group.

In general, we keep index numbers to indMs that is (n x dim) x dim matrix.

We pick every n elements in order. So far we do the same things as those for

non-aggregate model.

We set differently function fc in terms of paras rather than A and Q.

That is,

In addition, we change Kstar, K, K1, and Ks by xstar, x, x1, and xs.

For three groups of parameters, we set

para1=A1~Q1

para2=A2~Q2

para3=A3~Q3

and then

paras=para1|para2|para3

for the aggregate case.