Dynare forums

Dear Johannes,

In dynare, y(+1) represents Et[y(t+1)]. Since expectation forecast error for output is eta(t)=y(t)-E(t-1)[y(t)], should I define such forecast error in dynare as following:

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Ey=y(+1);
eta=y-Ey(-1)

Thanks in advance,
Huan

Yes, that is the proper way with auxiliary variables. You could also use

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eta=y-EXPECTATION(-1)(y)