# Analyzing the effects of unanticipated inflation

**URL:** <https://forum.dynare.org/t/analyzing-the-effects-of-unanticipated-inflation/17838>\
**Category:** Stochastic simulations\
**Created:** [8 April 2021 14:53 UTC](https://forum.dynare.org/t/analyzing-the-effects-of-unanticipated-inflation/17838 "2021-04-08T14:53:58Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![ramani](https://forum.dynare.org/letter_avatar_proxy/v4/letter/r/3da27b/32.png) [@ramani](https://forum.dynare.org/u/ramani)\
**Post date:** [8 April 2021 14:53 UTC](https://forum.dynare.org/t/analyzing-the-effects-of-unanticipated-inflation/17838/1 "2021-04-08T14:53:58Z")

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Dear Dynare developers, I am working with MIU model in which deposits, dt, in time period t by households are made before shocks (monetary, TFP etc.) are realized. But other variables consumption, ct, labor supply, nt, money holding , mt+1, etc. are chosen after these shocks are realized. Thus the first order condition for dt involves conditioning its choice on information set available at the end of period t-1 (E(t-1) 1/ct = beta E(t-1) 1/ct+1 RDt+1), where E(t) is expectation conditional on time t (after shocks) information set. But first order conditions for investment etc. involve terms such as E(t) 1/ct+1. I know how to write E(t)1/ct+1 in Dynare (1/c(+1)). But I am confused about how do I write E(t-1)1/ct in Dynare. Any help will be greatly appreciated. Thanks, Alok

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [8 April 2021 18:46 UTC](https://forum.dynare.org/t/analyzing-the-effects-of-unanticipated-inflation/17838/2 "2021-04-08T18:46:26Z")

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See e.g.

> [@End of period convention and decision lag](https://forum.dynare.org/t/end-of-period-convention-and-decision-lag/6014/2):
>
> Actually, from what you describe, I think the law of motion for n should be n\_t =(1-rho\_{t})n\_{t-1}+m\_{t} You inherit employment n\_{t-1} from the previous period, some matches dissolve based on rho\_t and you get new matches m\_t. This is similar to the law of motion for capital. Alternatively, you could shift the whole equation by 1 period: n\_{t+1} =(1-rho\_{t})n\_{t}+m\_{t} and use predetermined\_variables n Regarding the limited information assumption, you need to change the information set of t…