so confused about the parameters in preamble, please help!
Posted:
Thu Jan 14, 2016 3:48 pmby ppandxx
hi, i am new to dsge and dynare, so my question might be a little bit stupid. in the user guide, whe filling the preamble, the parameters such as beta psi delta alpha sigma epsilon are given, are they calculated out or given freely by the author? so confused~ needing all your explaination. mucho gracias!
Re: so confused about the parameters in preamble, please hel
Posted:
Thu Jan 14, 2016 4:35 pmby Konstantin Vasilev
You first define the parameters and then you set their values. You can take these values from other models or set them to match some characteristics of your model, e.g. setting discount factor - beta to match the steady state interest rate. So the parameters are given by the author but the author might have calculated them. Then those parameters are fixed for the simulation, but you may change them and simulate the model again with different values of the parameters and compare the simulations.
This can be seen in the example .mod files