Hi,

I want to obtain and compare the **conditional** welfare of two models (that differ by policy frameworks).

They have different steady states (and hence initial values for predetermined variables). Thus I want to make a fair comparison by simulating and obtaining the mean of the welfare **departing from the same Steady State**. I have been checking the manual and other forum entries and it looks like I can do this with **histval**.

I’ve been trying to find a working example but the one in the manual is missing 1 equation in the model block (page 37).

I have some questions about its implementation:

**1.** For setting the initial point should I use something like:

```
histval;
Rdc(-1) = 1.0101;
Bc(-1) = 0;
Ba(-1) = 0;
Bb(-1) = 0;
Kc(-1) = 41.0521;
Ka(-1) = 55.5583;
Kb(-1) = 55.5583;
end;
```

where the declared variables are the state variables of the model (that Dynare usually sets as the SS of the model).

or

```
histval;
Rdc(0) = 1.0101;
Bc(0) = 0;
Ba(0) = 0;
Bb(0) = 0;
Kc(0) = 41.0521;
Ka(0) = 55.5583;
Kb(0) = 55.5583;
end;
```

(My Decision Rule only has states with 1 lag. My hunch is that it should be X(0) then and that X(-1) is used when I need higher order lags to begin with, e.g., if I have some X(-2) in my decision rule)

**2.** In the histval block: Should I declare the steady state I want to depart from, or instead, deviations from such steady state ? (i.e., my intended departing point minus the actual steady state of the model in the file).

**3**. If I set in the model:

```
#Utilc = Cc^(1-siggma)/(1-siggma) - Hc^(1+pssi)/(1+pssi)
Wc = Utilc + betta*Wc(+1)
```

And at the end I set:

`stoch_simul(order=2,periods=200) Wc`

Would this output correspond to the conditional (on the same SS) welfare I am looking for comparing models?

```
MOMENTS OF SIMULATED VARIABLES
VARIABLE MEAN STD. DEV. VARIANCE SKEWNESS KURTOSIS
Wc -53.537709 0.896102 0.802998 -0.028222 -0.804784
```

Finally:

**4**. Is there any example file/link where the conditional welfare of two models is compared, hopefully using **histval** to achieve this?

In the case I am missing something and misinterpreting the manual and other entries in the forum, I’d also appreciate if someone indicates whether is wrong to do the Conditional Welf comparison with histval.

Best,

Camilo