Welfare ranking of monetary/ fiscal rules
Posted:
Thu Feb 05, 2015 10:23 pmby tom_mercer
Hello friends,
I wish to compare the welfare ranking of different combinations of monetary and fiscal rules for a New Keynesian model. Can Dynare provide welfare numbers to see which combination is the best - or is there some other way?
Thank you,
Tommy
Re: Welfare ranking of monetary/ fiscal rules
Posted:
Mon Feb 09, 2015 1:38 pmby jpfeifer
You need to define utility recursively and use a second order approximation. See e.g.
http://www.dynare.org/phpBB3/viewtopic.php?f=1&p=18427#p18427
Re: Welfare ranking of monetary/ fiscal rules
Posted:
Thu May 28, 2015 12:51 amby Ana
Can the model be entered *linearly* into Dynare to compute this recursive utility?
Also, can someone provide an example code - would like to check if W should be specified as part of the model block or outside.
Thank you,
Ana
Re: Welfare ranking of monetary/ fiscal rules
Posted:
Sun May 31, 2015 7:48 pmby jpfeifer
No, in general you cannot use a linear version of this. See my answer at
http://www.dynare.org/phpBB3/viewtopic.php?f=1&p=19991#p19991.
Yes, you need to define welfare within the model block.