# Optimal Policy **URL:** https://forum.dynare.org/c/optimalpolicy/13.md [Latest](https://forum.dynare.org/latest.md) · [Categories](https://forum.dynare.org/categories.md) --- ## [About the Optimal Policy category](https://forum.dynare.org/t/about-the-optimal-policy-category/10419)
**Author:** [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Replies:** 0\ **Last updated:** [24 July 2017 10:23 UTC](https://forum.dynare.org/t/about-the-optimal-policy-category/10419 "2017-07-24T10:23:26Z")
Questions regarding optimal policy (Ramsey, discretionary policy, optimal simple rules (OSR)) --- ## [Unconditional welfare in models with different steady state](https://forum.dynare.org/t/unconditional-welfare-in-models-with-different-steady-state/27178)
**Author:** [@ManuelG1](https://forum.dynare.org/u/ManuelG1)\ **Replies:** 13\ **Last updated:** [6 September 2026 13:39 UTC](https://forum.dynare.org/t/unconditional-welfare-in-models-with-different-steady-state/27178 "2026-09-06T13:39:06Z")
Hi, I would like to compare the unconditional welfare between two different models where model A has an extra sector compared to model B. Contrary to optimal policy studies, in this case the two steady states cannot be … --- ## [Understand the Dynare output of Ramsay plan](https://forum.dynare.org/t/understand-the-dynare-output-of-ramsay-plan/28459)
**Author:** [@ramani](https://forum.dynare.org/u/ramani)\ **Replies:** 4\ **Last updated:** [2 September 2026 20:10 UTC](https://forum.dynare.org/t/understand-the-dynare-output-of-ramsay-plan/28459 "2026-09-02T20:10:05Z")
I am trying to understand the Dynare output of Ramsay plan. I ran Nk\_ramsey\_osr.mod with the Optimal\_policy switch to 1 and the Ramsey switch to 1. The Dynare reports three values of welfare Approximated value of unco… --- ## [Ramsey policy model runs in Dynare 5.5 but fails with "ERROR: log(0) not defined!" in Dynare 6.x](https://forum.dynare.org/t/ramsey-policy-model-runs-in-dynare-5-5-but-fails-with-error-log-0-not-defined-in-dynare-6-x/28405)
**Author:** [@drodriguez](https://forum.dynare.org/u/drodriguez)\ **Replies:** 1\ **Last updated:** [7 June 2026 08:21 UTC](https://forum.dynare.org/t/ramsey-policy-model-runs-in-dynare-5-5-but-fails-with-error-log-0-not-defined-in-dynare-6-x/28405 "2026-06-07T08:21:42Z")
Hello, I am experiencing an issue when running a Ramsey policy problem that works correctly in Dynare 5.5 but fails in Dynare 6.x and up. The model solves without any problems under Dynare 5.5. However, in versions abo… --- ## [Policy frontier issues: differences in the volatility of the target variable generated by different policy rules](https://forum.dynare.org/t/policy-frontier-issues-differences-in-the-volatility-of-the-target-variable-generated-by-different-policy-rules/28339)
**Author:** [@rookie1996](https://forum.dynare.org/u/rookie1996)\ **Replies:** 1\ **Last updated:** [16 April 2026 21:05 UTC](https://forum.dynare.org/t/policy-frontier-issues-differences-in-the-volatility-of-the-target-variable-generated-by-different-policy-rules/28339 "2026-04-16T21:05:32Z")
Hi everyone, I recently ran into a problem while trying out the policy efficient frontier (pictured). Different policy rules generate huge differences in the volatility of the target variable, making it seem impossible … --- ## [OSR vs. Ramsey problem](https://forum.dynare.org/t/osr-vs-ramsey-problem/5680)
**Author:** [@tanvintyl5](https://forum.dynare.org/u/tanvintyl5)\ **Replies:** 20\ **Last updated:** [13 March 2026 08:52 UTC](https://forum.dynare.org/t/osr-vs-ramsey-problem/5680 "2026-03-13T08:52:16Z")
Hey guys, I have the following problem regarding my dynare output. I want to compare the values of the loss function for an OSR and a Ramsey policy in models that are otherwise identical. The objective function of both … --- ## [Parameters dependent on instrument //Ramsey steady state](https://forum.dynare.org/t/parameters-dependent-on-instrument-ramsey-steady-state/20711)
**Author:** [@Haydenknows](https://forum.dynare.org/u/Haydenknows)\ **Replies:** 3\ **Last updated:** [3 March 2026 11:15 UTC](https://forum.dynare.org/t/parameters-dependent-on-instrument-ramsey-steady-state/20711 "2026-03-03T11:15:36Z")
Hi professor, I have a question about the calibrated parameters of a ramsey model and estimation model. If there is a parameter that is dependent on the steady state value of instrument value, how should I assign the va… --- ## [Some problems with welfare analysis](https://forum.dynare.org/t/some-problems-with-welfare-analysis/28161)
**Author:** [@heroluotao](https://forum.dynare.org/u/heroluotao)\ **Replies:** 1\ **Last updated:** [9 January 2026 12:24 UTC](https://forum.dynare.org/t/some-problems-with-welfare-analysis/28161 "2026-01-09T12:24:56Z")
Hello everyone, I would like to inquire about the method of welfare analysis. When the literature does welfare analysis, some models are linearized and some models are not. As far as I know, welfare analysis requires a s… --- ## [Why are oo\_.steady\_state and oo\_.mean both zero after log-linearization (even with order=2)?](https://forum.dynare.org/t/why-are-oo-steady-state-and-oo-mean-both-zero-after-log-linearization-even-with-order-2/28072)
**Author:** [@chenxin](https://forum.dynare.org/u/chenxin)\ **Replies:** 3\ **Last updated:** [3 November 2025 14:27 UTC](https://forum.dynare.org/t/why-are-oo-steady-state-and-oo-mean-both-zero-after-log-linearization-even-with-order-2/28072 "2025-11-03T14:27:42Z")
Hi everyone, After I log-linearized my DSGE model and ran it in Dynare, I noticed that both oo\_.steady\_state and oo\_.mean are zero, regardless of whether I use a first-order (order=1) or a second-order (order=2) approxi… --- ## [zero standard deviation for welfare with cost-push shock and efficient steady state](https://forum.dynare.org/t/zero-standard-deviation-for-welfare-with-cost-push-shock-and-efficient-steady-state/27984)
**Author:** [@fraferla](https://forum.dynare.org/u/fraferla)\ **Replies:** 2\ **Last updated:** [24 September 2025 14:49 UTC](https://forum.dynare.org/t/zero-standard-deviation-for-welfare-with-cost-push-shock-and-efficient-steady-state/27984 "2025-09-24T14:49:45Z")
Dear Dynare Forum, I have a question regarding a result I repeatedly encounter when studying optimal monetary policy under a specific scenario. When I solve the Ramsey problem in a non-linear model with an efficient st… --- ## [Ramsey model optimizer](https://forum.dynare.org/t/ramsey-model-optimizer/27949)
**Author:** [@s.to.the.evi](https://forum.dynare.org/u/s.to.the.evi)\ **Replies:** 3\ **Last updated:** [3 September 2025 06:36 UTC](https://forum.dynare.org/t/ramsey-model-optimizer/27949 "2025-09-03T06:36:49Z")
Hello, I am sorry if my question is somewhat trivial, but I am doing my master’s and am new to dynare especially to problems minimizing a loss function of a planner. In the screenshot I provide my exercise (1 and 2 are t… --- ## [Ramsey optimal policy Problem in nonlinear model](https://forum.dynare.org/t/ramsey-optimal-policy-problem-in-nonlinear-model/19020)
**Author:** [@Jingjing](https://forum.dynare.org/u/Jingjing)\ **Replies:** 12\ **Last updated:** [27 August 2025 12:46 UTC](https://forum.dynare.org/t/ramsey-optimal-policy-problem-in-nonlinear-model/19020 "2025-08-27T12:46:07Z")
Dear All: I am trying to look for ramsey optimal policy in Gali Chapter 8 nonlinear model in Dynare 4.6.4, which this code comes from Prof. Pfeifer. But something is wrong, code is attached below: I have read mos… --- ## [Optimal policy under commitment (Ramsey)](https://forum.dynare.org/t/optimal-policy-under-commitment-ramsey/4357)
**Author:** [@dynare2014](https://forum.dynare.org/u/dynare2014)\ **Replies:** 16\ **Last updated:** [14 August 2025 13:32 UTC](https://forum.dynare.org/t/optimal-policy-under-commitment-ramsey/4357 "2025-08-14T13:32:42Z")
I was able to solve the model and find the steady state for my non-linear model. The next step, I need to find the optimal monetary policy that maximize the agent’s welfare! I used the following Ramsey’s policy command… --- ## [Problem about welfare loss value](https://forum.dynare.org/t/problem-about-welfare-loss-value/12804)
**Author:** [@aibenaimer1](https://forum.dynare.org/u/aibenaimer1)\ **Replies:** 9\ **Last updated:** [14 August 2025 11:56 UTC](https://forum.dynare.org/t/problem-about-welfare-loss-value/12804 "2025-08-14T11:56:22Z")
Dear all， I built a DSGE model to compare the effects of several monetary policies. The welfare loss function is in the form of Woodford (2003) and Galí and Monacelli（2005）. I would like to ask how to calculate the … --- ## [Question about welfare analysis](https://forum.dynare.org/t/question-about-welfare-analysis/27818)
**Author:** [@Zwq](https://forum.dynare.org/u/Zwq)\ **Replies:** 2\ **Last updated:** [27 July 2025 14:45 UTC](https://forum.dynare.org/t/question-about-welfare-analysis/27818 "2025-07-27T14:45:25Z")
Hello professor,I am trying to implement a consumption equivalent welfare analysis in a model where the fiscal policy parameter will affect the steady-state value.But the question is ,when I compute the steady state, I u… --- ## [Decomposition of CEV in mean and variance effect](https://forum.dynare.org/t/decomposition-of-cev-in-mean-and-variance-effect/27794)
**Author:** [@Hugo\_15](https://forum.dynare.org/u/Hugo_15)\ **Replies:** 7\ **Last updated:** [21 July 2025 08:15 UTC](https://forum.dynare.org/t/decomposition-of-cev-in-mean-and-variance-effect/27794 "2025-07-21T08:15:56Z")
Dear all, I post this message because there is something that I do not fully understand in the welfare decomposition. I am working with a model where I compute the conditional welfare as : W=W^{ss} +1/2\\times Var^{W} wh… --- ## [Welfare in TANK model Lee (2025)](https://forum.dynare.org/t/welfare-in-tank-model-lee-2025/27727)
**Author:** [@Samvel](https://forum.dynare.org/u/Samvel)\ **Replies:** 4\ **Last updated:** [26 June 2025 12:10 UTC](https://forum.dynare.org/t/welfare-in-tank-model-lee-2025/27727 "2025-06-26T12:10:20Z")
Dear all, I would like to ask for advice on how to conduct a welfare analysis in Dynare. I am trying to replicate the results from “Optimal Monetary Policy under Heterogeneous Consumption Baskets” by Seunghyeon Lee. I h… --- ## [Forecasts using Ramsey optimal policy](https://forum.dynare.org/t/forecasts-using-ramsey-optimal-policy/6024)
**Author:** [@felipeboralli](https://forum.dynare.org/u/felipeboralli)\ **Replies:** 5\ **Last updated:** [21 May 2025 13:54 UTC](https://forum.dynare.org/t/forecasts-using-ramsey-optimal-policy/6024 "2025-05-21T13:54:33Z")
Hello, I would like to make a forecast from a given state using Ramsey Optimal Policy. Is this possible? I have tried to find this in the documentation, but I could not. I also thought about stacking impulse responses … --- ## [Ramsey with exogenous path](https://forum.dynare.org/t/ramsey-with-exogenous-path/27583)
**Author:** [@ramsey123](https://forum.dynare.org/u/ramsey123)\ **Replies:** 1\ **Last updated:** [15 May 2025 06:42 UTC](https://forum.dynare.org/t/ramsey-with-exogenous-path/27583 "2025-05-15T06:42:35Z")
Good morning Professor Pfeiffer, is it generally possible to find an optimal Ramsey policy for a model with an exogenous path for one of the variables (e.g., debt level)? My model fails when I implement the Ramsey compo… --- ## [Welfare in Ramsey lower than under simple rule](https://forum.dynare.org/t/welfare-in-ramsey-lower-than-under-simple-rule/27571)
**Author:** [@hubertus.oblong](https://forum.dynare.org/u/hubertus.oblong)\ **Replies:** 1\ **Last updated:** [12 May 2025 14:40 UTC](https://forum.dynare.org/t/welfare-in-ramsey-lower-than-under-simple-rule/27571 "2025-05-12T14:40:57Z")
Good afternoon, I have a related conceptual problem when comparing optimal policy and optimal simple rules. In both cases, I use dynare but I do not use OSR or the Ramsey procedure in dynare. Instead: For simple rules… --- ## [Welfare comparison with Ramsey optimal policy](https://forum.dynare.org/t/welfare-comparison-with-ramsey-optimal-policy/6210)
**Author:** [@bvajda](https://forum.dynare.org/u/bvajda)\ **Replies:** 10\ **Last updated:** [9 April 2025 12:32 UTC](https://forum.dynare.org/t/welfare-comparison-with-ramsey-optimal-policy/6210 "2025-04-09T12:32:21Z")
Hi All, I’m trying to compare the welfare properties of different policy rules in a version of the Gertler and Karadi (2011). In all of my model specifications I’m able to include a Welfare variable such that Welf = U… --- ## [Ramsey policy(two instruments)](https://forum.dynare.org/t/ramsey-policy-two-instruments/11795)
**Author:** [@petiteelf](https://forum.dynare.org/u/petiteelf)\ **Replies:** 25\ **Last updated:** [29 April 2025 13:29 UTC](https://forum.dynare.org/t/ramsey-policy-two-instruments/11795 "2025-04-29T13:29:12Z")
Hello, dear Prof. Jpfeifer. I am currently running an optimal ramsey policy. when I use only R(taylor rule) instrument, it works. But when I add the tax(two instruments), there are error messages. (1) When i use the ve… --- ## [Lag == 0 error when solving for Ramsey optimal policy](https://forum.dynare.org/t/lag-0-error-when-solving-for-ramsey-optimal-policy/27458)
**Author:** [@john1](https://forum.dynare.org/u/john1)\ **Replies:** 3\ **Last updated:** [28 April 2025 23:26 UTC](https://forum.dynare.org/t/lag-0-error-when-solving-for-ramsey-optimal-policy/27458 "2025-04-28T23:26:35Z")
Hi I’m trying to solve for the Ramsey optimal equilibrium in a fairly large model. I have excluded the estimated policy rule from the model block. And I have the following code at the end of my mod file: planner\_object… --- ## [Dynamic optimal tax](https://forum.dynare.org/t/dynamic-optimal-tax/27459)
**Author:** [@Random.t](https://forum.dynare.org/u/Random.t)\ **Replies:** 7\ **Last updated:** [17 April 2025 19:29 UTC](https://forum.dynare.org/t/dynamic-optimal-tax/27459 "2025-04-17T19:29:50Z")
Hi all, when I run perfect foresight exercises I notice that the variable wrt I specify the transition (from an initial steady state with no tax to a final one with a tax\>0) jumps in the second period and remains consta… --- ## [Does dynare osr assumes committment or discretionary?](https://forum.dynare.org/t/does-dynare-osr-assumes-committment-or-discretionary/19559)
**Author:** [@kofiemma](https://forum.dynare.org/u/kofiemma)\ **Replies:** 12\ **Last updated:** [16 April 2025 13:49 UTC](https://forum.dynare.org/t/does-dynare-osr-assumes-committment-or-discretionary/19559 "2025-04-16T13:49:31Z")
Because we are choosing \\gamma (a constant) to minimize our objective (here, the objective of the central bank), commitment or discretionary does not matter, right? --- ## [Conditional steady state](https://forum.dynare.org/t/conditional-steady-state/27424)
**Author:** [@Random.t](https://forum.dynare.org/u/Random.t)\ **Replies:** 1\ **Last updated:** [11 April 2025 11:42 UTC](https://forum.dynare.org/t/conditional-steady-state/27424 "2025-04-11T11:42:07Z")
Hi everybody, I am struggling with the notion of “conditional steady state” needed in the ramsey policy set up. What a steady state conditional on the value of the instrument would differ on wrt a usual steady state? … --- ## [Steady state conditional on the instrument](https://forum.dynare.org/t/steady-state-conditional-on-the-instrument/27385)
**Author:** [@Random.t](https://forum.dynare.org/u/Random.t)\ **Replies:** 5\ **Last updated:** [2 April 2025 07:37 UTC](https://forum.dynare.org/t/steady-state-conditional-on-the-instrument/27385 "2025-04-02T07:37:14Z")
Hi everybody, I am trying to find the optimal carbon tax in a 2 sector dsge model and I get the following error: Ramsey: The steady state file does not solve the static first order conditions conditional on the instrum… --- ## [Optimal discretionary policy in Smets, Warne and Wouters (2014)](https://forum.dynare.org/t/optimal-discretionary-policy-in-smets-warne-and-wouters-2014/27278)
**Author:** [@ap1986](https://forum.dynare.org/u/ap1986)\ **Replies:** 1\ **Last updated:** [9 March 2025 18:35 UTC](https://forum.dynare.org/t/optimal-discretionary-policy-in-smets-warne-and-wouters-2014/27278 "2025-03-09T18:35:38Z")
EA\_SWW14\_forum.mod (8.9 KB) steadystate.m (828 Bytes) Dear Professor Pfeifer, I am trying to perform optimal discretionary policy within the Smets, Warne and Wouters (2014) model (which itself is very similar to Gali,… --- ## [Comparing the Welfare under Ramsey Policy and OSR](https://forum.dynare.org/t/comparing-the-welfare-under-ramsey-policy-and-osr/15675)
**Author:** [@Chashika](https://forum.dynare.org/u/Chashika)\ **Replies:** 0\ **Last updated:** [24 April 2020 20:00 UTC](https://forum.dynare.org/t/comparing-the-welfare-under-ramsey-policy-and-osr/15675 "2020-04-24T20:00:40Z")
Dear Prof. Pfeifer, I have been trying all the resources here to find a solution to my problem but I could not. I developed a DSGE model similar to Airaudo and Olivero (2019). They use Ramsey Policy. I developped the m… --- ## [Ramsey model - issue with "maximum number of iterations has been reached"](https://forum.dynare.org/t/ramsey-model-issue-with-maximum-number-of-iterations-has-been-reached/27162)
**Author:** [@Ste](https://forum.dynare.org/u/Ste)\ **Replies:** 1\ **Last updated:** [11 February 2025 13:38 UTC](https://forum.dynare.org/t/ramsey-model-issue-with-maximum-number-of-iterations-has-been-reached/27162 "2025-02-11T13:38:15Z")
Dear Professor Pfeifer, I have an issue with the Ramsey model. I want to compute the Ramsey policy solution of the attached model (mod+steady state file). The instrument is the policy rate (R) and I have commented the T… [Next page](https://forum.dynare.org/c/optimalpolicy/13.md?page=1)