olr and optimal policy
Posted: Sat Nov 03, 2007 2:02 amHi everyone
I have the following doubt. If I am not wrong, during the Dynare summer school Professor Juillard told us that the olr syntax (which computes optimal policy under commitment ) has been replaced by the new syntax:
planner_objective y^2+pi^2; (y=output, pi=inflation)
ramsey_policy(order=1,irf=0,planner_discount=0.99);
Am I right?
Moreover, is the value of the loss associated with the particular planner objective stored somewhere?
In end, if I run the code with a model that I have derived setting in it the commands for the computation of the ramsey policy (using y^2+pi^2), the policy and transition functions I obtain don't depend on y and pi. What does it mean? Does it mean that the central planner cares about y and pi variability but that it should not change the interest rate in response to variation in y and pi?
I have the following doubt. If I am not wrong, during the Dynare summer school Professor Juillard told us that the olr syntax (which computes optimal policy under commitment ) has been replaced by the new syntax:
planner_objective y^2+pi^2; (y=output, pi=inflation)
ramsey_policy(order=1,irf=0,planner_discount=0.99);
Am I right?
Moreover, is the value of the loss associated with the particular planner objective stored somewhere?
In end, if I run the code with a model that I have derived setting in it the commands for the computation of the ramsey policy (using y^2+pi^2), the policy and transition functions I obtain don't depend on y and pi. What does it mean? Does it mean that the central planner cares about y and pi variability but that it should not change the interest rate in response to variation in y and pi?