welfare computation
Posted: Thu Apr 12, 2007 7:30 am
Hi,
Suppose U is my utility function, if I want to compute conditional expectation of utility, should I just create a new variable con_util = U + bet* U(+1), where bet is the subjective discount factor, and then just read the mean of con_util from the results reported by dynare in a second order approximation?
Thanks.
Suppose U is my utility function, if I want to compute conditional expectation of utility, should I just create a new variable con_util = U + bet* U(+1), where bet is the subjective discount factor, and then just read the mean of con_util from the results reported by dynare in a second order approximation?
Thanks.