Hi. My question is that how we can set values in conditional forecast paths command ?

For example suppose that we want to forecast Y or production for 20 future periods. In the aforementioned command in Dynare how we can define or set values? What is the interpret of these values?

Thank you so much.

What exactly are you trying to do? Conditional forecasts are about forecasting variables while e.g. keeping interest rates at a particular value in the future, i.e. conditioning on that path.

I want to forecast future path of Production and Consumption. I set these values equal to the latest real value of production and consumption for 1 period as follows.

conditional_forecast_paths

vars Y

periods 1

values -0.005

vars C

periods 1

values -0.001

end

This means that I set the first period of forecasting of Y and C equal to their real last values.This means that when these variables subject to shocks in the first period value of forecast is fixed and after one period values of forecasting of these variables change due to the shocks. After first period dynare calculates the forecasting of these variables for future periods with confidence intervals.In some cases researchers forecast future path of interest rate in a specified level but my main goal is forecasting of production and consumption in the model.

What you specify here means that you restrict Y and C to take on the specified values in the first forecast period. To achieve that, shock realization must take particular values. After that there are no restrictions and the further forecasts are unconditional. However, the restriction in the first period will have an influence going further. Thus, the `conditional_forecast`

-command is no substitute for the `forecast`

-command.