Dynare forums

Dear all

I have a model in which my shock takes place in the old population in a OLG model. This shock has probability .1 and can take values in a grid with 300 values. when the shock realizes, there is insurance that fully covers the loss caused by it.

How can I model this shock and insurance with Dynare?

Thank you

Dynare does not work with discretized state spaces. This is not the class of models the program can solve. Stochastic models are solved with perturbation techniques.