How do you calculate First Order Condition? Manually? Can any package do this?Maybe Mathematica? lol.
Thx.
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F.O.C.
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Re: F.O.C.
by SébastienVillemot » Fri Mar 08, 2013 1:51 pm
FOC are calculated by the Dynare preprocessor, which is a C++ program computing analytical derivatives of the model equations.
Sébastien Villemot
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Re: F.O.C.
by jpfeifer » Fri Mar 08, 2013 3:23 pm
Actually, Dynare does not compute the FOCs (like e.g. the Euler equation). Dynare does the linearization of the FOCs by automatically computing the Taylor approximation, i.e. taking the required derivatives.
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Re: F.O.C.
by SébastienVillemot » Sat Mar 16, 2013 4:09 pm
Thanks for correcting me.
Note that there is however one case where Dynare really computes the FOC: it is when using ramsey_policy.
Note that there is however one case where Dynare really computes the FOC: it is when using ramsey_policy.
Sébastien Villemot
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