A question from the paper LAND-PRICE DYNAMICS AND MACROECONOMIC FLUCTUATIONS

hi! I have trouble reading the paper LAND-PRICE DYNAMICS AND MACROECONOMIC FLUCTUATIONS
can you explain the following words to me? what is the author trying to do and can it be done in dynare?
“To quantify how much our model’s propagation mechanism contributes to explaining both
the BVAR facts and the recent sharp declines in land prices and business investment, we
compute counterfactual simulations of history from the model based on the estimated time
series of housing demand shocks. We find that the simulated data yield a driving force behind
the observed, strong co-movements of land prices with investment, hours, and consumption.”

I guess you are referring to the Liu/Wang/Zha (2013) Econometrica paper. But in that paper I cannot find the quote you cite. Are you using a different version? Note also that replication files are available at the journal’s homepage.

oh I am reading the nber working paper version http://www.nber.org/papers/w17045 I guess the author simulate the model using only two shocks after estimation .and using the simulated data to do BVAR. is that right? can it be done using the simul ?thanks a lot!

Yes, you can do that using simult_.m. See my reply at Simulate data using shocks