Analysing log data density


I understand that when comparing two models we can use the log data density, but I’m not quite sure what log data density actually provide - I know that we normally choose the model with highest data density, but is this also the case with RBC-models where we are supposed to obtain high volatility?
If someone are able to provide me with additional information on this I would really appreciate it!

Thank you in advance!

Sorry, but I don’t understand the question. What does volatility have to do with this? Also, please see

Thanks for taking you time!

Sorry, the question is not about the volatility - it was if you/someone could provide me with some additional information of what I can obtain from the results of log data density and also whether i should choose the RBC with the highest density?


Please have a look at the reference above. Yes, you choose the model with the highest marginal data density. See also