How do implement counterfactuals in Dynare?

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How do implement counterfactuals in Dynare?

Postby Pert » Fri Sep 10, 2010 11:24 am

Hey guys,

How does one actually implement counterfactuals a la Christiano, Motto, Rostagno (Working Paper 2007) -- http://www.nber.org/papers/w13521.pdf
(Europe counterfactuals on growth, inflation, etc., if replaced by U.S, monetary policy, persistence, shocks, structure)?
Would simply changing the parameters in the mode file produce the correct results, or would that be wrong?

Also in Smets-WoutersAER 2007, I cannot reproduce their counterfactual in Table 6 with respect to shocks and structure (I can only reproduce the counterfactual on "policy" -- that I did either by changing the mode file specific parameters, or by fixing the values of the parameters in the mod file appropriately. Am I doing the right thing, or are the authors (SW) possibly wrong in the table? (unlikely, because this is a very well written AER paper).

So also, in Burriel, Fernandez-Villaverde and Rubio-Ramirez (Working Paper 2009) "MEDEA: DSGE for Spanish Economy", http://www.fedea.es/pub/papers/2009/dt2009-17.pdf , the authors in p 33 et seq and Table 5 etc., did counterfactuals by analyzing the long run effects of reduction in tax rate. But I don't know how they implemented it in Dynare. Anybody knows?

Lastly, in Christoffel, Coenen, Warne, "New Area Wide Model of the Euro Area...", http://www.nber.org/papers/w13521.pdf , p 56 and 109, the authors did the counterfactuals by changing the actual wage data, with higher wage data, and observed what would have happened to the other variables. How does one implement that in Dynare?

Thank you guys, for any tips and opinions.

Best.
Pert
 
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