Hi
I have tried to search for the answer but unfortunately I cannot find an answer. So I hope you may help me. Is it possible to calculate the size of the intertemporal loss in Dynare? I’m just interested in a standard quadratic version.
Can you be more specific? What do you mean by saying inter-temporal loss? Are you calculating quadratic welfare loss function in NK model?
Yes exactly. Of course it is straight forward to calculate the loss for a given period ½(pi^2+lambda*x^2) but for me it seems less straight forward to calculate it over the infinite time horizon? (as 8.45 page 357 in Walsh)
Which Walsh edition do you refer to?