My question about exogenous variables?
Posted:
Thu Mar 14, 2013 12:14 pmby jinyou_yin
In a dynare program, how should we process exogenous variables? In my model, I set three exogenous variables(not the shocks),and they also change according time t.
In the program of simulation ,how should i process them?
Re: My question about exogenous variables?
Posted:
Tue Mar 19, 2013 9:52 pmby jpfeifer
Please use a textbook to reread the distinction between parameters, endogenous and exogenous states and endogenous (jump) variables. If something is truly exogenous and has not stochastic process (no shock as you say) it is constant and should be treated as a parameter. If they are affected by shocks at time t as you say, they are endogenous variables.