How to calculate central bank loss function

Hi all,

I have a question about calculate loss function.

1)-How can i calculate the central bank loss function by using DSGE model with dynare. I did not clearly understand how can i calculate variance of variables like in table 1,2,3 and 4. in attach file. When i run your mod.file but i did not see variance of variables. is that calculate from std dev. moments of simulated of variables?

Thanks in advance.
loss analysis.pdf (280 KB)

Yes, Dynare will provide theoretical moments with order=1 and periods=1. These numbers can be plugged into the loss-function.

Thanks for your response jpfeifer. Could you please send me more information about this issue.

Thanks in advanceā€¦

What do you mean? You may want to have a look at github.com/DynareTeam/dynare/blob/master/tests/optimal_policy/osr_example_objective_correctness.mod how to manually access the variances and construct an objective function.