Dear everybody,
I'm a basic user, I ran 2 DSGE models A and B, "Log marginal data densities"of A is H0= 184.14, H1= 168.18,B is Ho = 184.3, H1 = 166.09. As i know,model comparison is based on posterior odds ratio. But, i don't know how to calculate prior odds ratio and posterior odds ratio? Can you show me the way to calculate and compare? Is the model have higher posterior odds ratio better ?Is The posterior probabilities evaluated by posterior odds ratio ?
Thanks a lot.
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Compare 2 DSGE models
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Compare 2 DSGE models
by tophukg » Sun Sep 01, 2013 3:49 am
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Re: Compare 2 DSGE models
by jpfeifer » Mon Sep 02, 2013 3:16 pm
Consult the textbook "Bayesian Econometric Methods" by Gary Koop. It covers this issue in much detail at a moderate level of formality.
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Re: Compare 2 DSGE models
by tophukg » Mon Sep 02, 2013 3:49 pm
Dear jpfeifer ,
Thanks for your reply.
Best.
Thanks for your reply.
Best.
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