A question about OSR command and policy frontier

Optimal Policy
1

Dear all,
I am now using OSR to calculate the simple optimal rule and plot the policy frontier.
But I find that all the papers on the topic of policy frontier have given a limitation on variance of the key variable,e.g., in Iacoviello(2005), "I constrain interest rate volatility by imposing an upper bound 25 percent larger than the estimated standard deviation…"
So how should I put a variance constraint in OSR?
Thanks.

2

Anyone knows that?
Great thanks.

3

That is not easy to impose. Dynare allows you to impose bounds on the parameters, not on the endogenous objects. In the exampe posted at [Policy frontier) you would probably need to check whether

var_y(grid_iter)

is above a particular value and then set the output to NaN.

4

Thanks, I will try.
And could you tell me how to impose constraint on the value of the parameters?

5

See the manual of the unstable version/4.5 on osr_params_bounds

6

Thanks a lot!
So is there a guide for how to setup dynare 4.5?
and can it co-exist with 4.4.3?

7

The unstable version is available at dynare.org/download/dynare-unstable/
You can select the Dynare version you want to use by providing Matlab with the path to the Matlab subfolder of the respective Dynare version.

8

Thanks a lot .
So if I simultaneously add both 4.43 and 4.5 unstable into the matlab path, which version will matlab choose to run ?
And how could I choose to run one of these two versions if I wanna to manually, if both of them are in my matlab path?

9

Always only add the one you want to your path. For example, when you use 4.4.3, use something like

addpath('C:\dynare\4.4.3\matlab')

in Matlab to select 4.4.3 (of course with your path)