Say we have 7 observed variables. 6 of them need to be demeaned and 1 of them doesn’t need to be demeaned. If we use the option ‘prefilter=1’ then that would demean all 7 series. Is there any way that we can avoid demeaning one of the series.



I do not use the option prefilter in Dynare. I usually do data transformation in the Matlab file where the data is stored. This is easier because you can do whatever transformation you need to do in all or some of your observables.

Hope this helps.