I have a function .mod file for my model. As I run my model with a second order solution in the output I get the policy function coefficients. I was wondering how to correctly simulate the model’s data through this policy functions.
Also, as I understand, these policy functions relate past values of state variables and the realizations of shocks. However, there is not a way to relate the model in a foward looking fashion relating state variables with also the expected value of some variables?