Truncation of Prior

[reubenpjacob]

is it possible to truncate the prior in a bayesian estimation exercise in dynare?
say if you have a normal prior, can you truncate it to cover only the non-negative domain?

reuben

[ilcosmin]

when you declare the prior, you can specify bounds for the parameter. it's done by adding the bounds after the mean and std.dev of the prior
ex:sigma, inv_gamma_pdf, 2, .2, 0.01, 3;
the last two numbers specify the interval you allow the parameter to be in.
Cosmin

[reubenpjacob]

thanks. does the truncation guarantee that the prior density will integrate to unity? if you truncate it, the constant of integration would change, right.


reuben

[ilcosmin]

You're right. I am not sure, but the integration to unity should happen by changing the constant.
Cosmin