First of all, thank you so much for your reply, professor.
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I don’t understand what you mean. I found that when I erased some shocks or changed the standard deviations of any shocks in the shock block, the optimal coefficients considered in my policies also changed. It is consistent with your answer?
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I just really appreciate your help and thank you for the link. I can download it now.
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I thought that by OSR, I can derive the social welfare of the cooperative game set in the ‘optim_weights’ block and compare the one of the baseline model. And the welfare is unconditional welfare. Is it right? Also, I’m also confused with the code you provided in Optimal policy parameters in a non-linear model for maximizing social welfare. I thought the lifetime welfare are approximated in second order, then, it is just the unconditional welfare as well. Am I right? I can’t find the difference between your code and OSR.
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Plus, I want to ask some questions about the meaning of unconditional welfare and conditional. In Unconditional versus conditional Welfare measure, the unconditional welfare corresponds to the unconditional ergodic mean of the welfare variable. So, the mean is just the simple average of the welfare variable over the periods I set in stoch_simul command?
On the other hand, I saw the comment, Unconditional versus conditional Welfare measure - #8 by HelloDynare. I got confused since when it comes to the question 3, in the process of finding the unconditional welfare, does the economy also start with the steady state? What’s the difference? (I entered the all steady state value of the endogenous and exogenous variables in initval block.) Finally, in the comment, “Risky steady state : despite no shocks , the agent observes the distribution of the shocks that may hit the economy in future, e.g. standard deviation σ.”, So how can we identify the agent’s consideration in Dynare code? I believe that the standard deviations in shock block do not show the consideration. I thought the risky steady state corresponds to conditional welfare.
Sorry for too many questions. at this time, I’m beginner of MATLAB and Dynare and I got lost in my road for my graduation. Please understand my situation. I really appreciate much.
Without wax,
Shin.