Dear All,
The dynare 4.6.0 manual mentions that the hybrid option of Extended Path does the following:
hybrid
Use the constant of the second order perturbation reduced form to correct the paths generated by the
(stochastic) extended path algorithm.
Presumably what it is referring to is on page 15, Section 6.2 of Stephane and Michel’s (2013) manuscript:
Adjemian Juillard WP 2013 Stochastic Extended Path Approach
My question is whether, stability considerations aside, there are there any circumstances in which you would recommend disabling this option? Expressed alternatively, the manuscript reports a spectacular increase in accuracy in one of the two examples discussed and little difference in the other), so it would appear that there is mostly upside potential; unless anyone is aware of cases in which accuracy had actually decreased with this option enabled?
Thanks in advance for sharing any thoughts on this!