A question on expectations

[tokhir]

Suppose my equation involves an expression: E_t(x_{t+1})/E_t(y_{t+1}) as opposed to E_t (x_{t+1}/y_{t+1}). Both expressions would be entered identially in a dynare code as (x_{t+1}/y_{t+1}).

Does Dynare allow to differentiate where to place the expectation sign?

Thanks!

[MichelJuillard]

Introduce two additional auxiliary variables Ex and Ey

Code: Select all

Ex = x(+1);
Ey = y(+1);


then E_t(x_{t+1})/E_t(y_{t+1}) is Ex/Ey

Best

Michel

[tokhir]

Thanks a lot for your help!