Hi,

I’m trying to research the relationship between different exogenous shocks, and the dynare.pdf says that we can set correlation or covariance.

So could I set the prior distribution of correlation or corariance， and then estimate the posterior distribution of correlation or corariance with data?

For example:

shocks;

var e_a e_b; stderr 0.1; (or) corr e_a e_b; stderr 0.1;

end;

estimate;

stderr e_a e_b,inv_gamma_pdf,0.1,inf;

end;

Thank you.