Difference between Occbin and DynareOBC

Dynare contributions and examples
1

Hi,

I am trying to compute the model with an occasionally binding constraint(ZLB).

It seems that there are two toolkits for solving such a model, like Occbin and dynareOBC. Since there are lots of contents related to the latter, I am using dynareOBC now.

However, which is preferable when you solve a model with ZLB, or is there any difference between the algolithms?

I would greatly appreciate any help.

2

@cfp can provide details, but my understanding is that everything you can do with Occbin is feasible with DynareOBC, but the latter is much more powerful.

3

Thanks @jpfeifer !

DynareOBC is guaranteed to find a solution if there is one. It can work with higher order solutions to the model, and it can approximate the effects of the risk of hitting the bound.

However, DynareOBC should not yet be used for estimation.

Also see this old thread: Conceptual questions on simul, stoch_simul and extended_path with OBC

4

Hi Professor,

Thank you for the quick response.

I see. I will use DynareOBC mainly!

Thank you!

5

Hi Professor,

Thank you for the quick response.

I see. I would like to use these toolkits also for estimation, so your comment was very helpful.

Thank you!

6

Hi cfp,I am reading through the readme file of DynareOBC v3.30.54.1968 which is released in Feb 2021. I find that one of the options for DynareOBC command is “estimation”, does it mean the latest version could do beysian or MLE estimation?

7

As I said, don’t use DynareOBC for estimation. That option is not in a fit state.

8

Got it,thank you.