In business cycle accounting, one must estimate the parameters of the Markov process s_t = P_0 + Ps_{t-1} + \epsilon_t,\;\; var(\epsilon_t) = V = QQ', using, say, MLE.

For replication purposes, prof. Johannes Pfeifer uses values for P_0, P, Q from the original paper in both the `parameters;`

block and `estimated_params;`

block (i.e., as priors) in dynare.

- For other countries, we need to change the initial values of the parameter in
`parameters;`

block and priors in`estimated_params;`

block, for P_0, P, Q, yeah? Or no major issues on the results for using similar values in the original paper? - Also, in the replication mod file, the log of the data is linearly detrended. But one could have also used the HP filter, right?
- And also in the mod file, it says government spending enters model in logs. So, for example, in resource constraint, g is in logs and other variables are in levels? But you cannot add levels and logs data, right…I know my understanding here is wrong, but I cannot understand that statement.

```
%resource constraint (A.2.1)
exp(c)+exp(g)+(1+gamma_z)*(1+gamma_n)*exp(k(+1))-(1-delta)*exp(k)=exp(y);
```