Medical shock in OLG model

Dynare help (legacy posts)
1

Dear all

I have a model in which my shock takes place in the old population in a OLG model. This shock has probability .1 and can take values in a grid with 300 values. when the shock realizes, there is insurance that fully covers the loss caused by it.

How can I model this shock and insurance with Dynare?

Thank you

2

Dynare does not work with discretized state spaces. This is not the class of models the program can solve. Stochastic models are solved with perturbation techniques.