My question about exogenous variables?

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My question about exogenous variables?

Postby jinyou_yin » Thu Mar 14, 2013 12:14 pm

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?
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Re: My question about exogenous variables?

Postby jpfeifer » Tue Mar 19, 2013 9:52 pm

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.
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Johannes Pfeifer
University of Cologne
https://sites.google.com/site/pfeiferecon/
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