Hallo every one
Can someone help me my confusion about the Bayesian estimation of DSGE model below?
In Dynare we specify
is to find the mode computation. I wonder that this “mode_compute” is to find the maximum likelihood or what? Because the posterior density is proportional to the product of prior and likelihood densities, thus, the finding of the mode means that finding of the highest degree of the log-likelihood.
Once the mode is found, the next step is to use the MCMC for inference