- Yes, those are simulated ones, because you only simulated the model.
- Of course you could use the variance formula. It would give exactly the same result.
Iam still stucked with this problem. As I found out the shock is an on-off shock and the loss is not computed as stochastic sequences of shocks. So, iam still wondering why
w_pi = 0.5 ;
w_x = 0.25;
LossVal = w_pi * var(v_solution(2,:)) + w_x * var(v_solution(1,:));
give me the right loss?
Again, you need to tell us clearly what you are trying to do and what the welfare objective is.
Dear Prof. Pfeifer,
I just want to compute the loss of a hybrid nkm in commitment and discretion as I did with dynare. The way and the code for dynare to calculate the loss is clear. My results are right.
I computed both model with matlab too, but do not get the right loss. This is my Matlab Code under commitment.
My welfare function is:
Jo=1/2*(pi^2 + lambda*x^+2) where lambda is equal to one.
It seems so simple but still I have problems
This is my matlab code
COMMITMENT.m (3.7 KB)