Dear Johanes, dear all,

I am trying to understand better how priors are set up in Dynare. Apologies in advance if this is very basic. I set beta priors and I get densities that are balanced around the mean I set, but I would expect more skewness. Let me be more specific with an (abstract) example. I set

kappaa1 , beta_pdf , 0.56 , 0.1

According to my calculations, the corresponding parameters of the beta-distribution are alpha = 0.8198 and beta = 0.6442. Indeed, this is confirmed by running the following commands:

X = betarnd(0.8198, 0.6442, 1000000, 1);

mean(X)

var(X)

where `mean(X)`

and `var(X)`

will be arbitrarily close to 0.56 and 0.1 - up to a numerical error. However, the:

histogram(X)

looks vastly different than the plot that Dynare produces for the prior. I am sure I am doing something wrong, or I misunderstood something… Thanks a lot!

Best,

Kyriacos