First thank you for your previous guidance, I am grateful.
I have a basic question about using the command ‘varobs’ to list observables, I am wondering that does the variables listed after the command ‘varobs’ influence the identification scheme of DSGE model in Dynare?
Thank you very much and look forward to hearing from you.
The ordering within the command does not affect identification, but the variables specified there do as a set. The reason is that you are asking whether the parameters in the model can be identified given that you observe the realization of the observables. It does not matter whether you observe output first or second, but that you observe output.