Hallo
I am working on an open-economy DSGE model by using Bayesian method. I have some questions that i can not answer myself
1. how to choose an initial value?
2. How we can make sure that the posterior values are acceptable?
I means that the coefficient of inflation in the Taylor's rule, for example, should be greater than 1, then
Firstly, I assign the initial value as 1.2, the result is 1.4
Secondly, I assign the initial value as 1.4, the result is 1.5
Then how can I choose them?