Intertemporal and intratemporal shocks on the utility

[sarah]

Hi!

In order to make a Bayesian estimation I need to add two preference shocks to a Cobb Douglas utility function

Code: Select all

U=chi*[C^theta*(1-eta*L)^1-theta)]

Where chi and eta are intertemporal and intratemporal preference shocks, L is labor, 1-L is leasure, C consumption. Anyone can suggest me any paper or Dynare example of this? I am having many troubles getting a correct dynare implementation of it in log-linearized form.

Thank you very much!

Sarah

[jpfeifer]

This should be straightforward. Could you be more precise what issues you encounter/where the problems are?

[sarah]

Ok it was just and algebric issue... thanks!

[chrisjaur]

Would someone be able to provide sample dynare code for log-linearization of the first order conditions (for consumption and labor) for these preferences! Thank you sooo much in advance!

[jpfeifer]

What exactly is your question? The AguiarGopinath2007.mod on my homepage has this type of preferences implemented.