# Monthly parameters calibration from quarterly values

**URL:** <https://forum.dynare.org/t/monthly-parameters-calibration-from-quarterly-values/21823>\
**Category:** ML/Bayesian estimation\
**Created:** [25 January 2023 10:55 UTC](https://forum.dynare.org/t/monthly-parameters-calibration-from-quarterly-values/21823 "2023-01-25T10:55:15Z")\
**Posts on this page:** 4\
**Page:** 1

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**Author:** ![veronica\_acurio\_v](https://forum.dynare.org/letter_avatar_proxy/v4/letter/v/a9a28c/32.png) [@veronica\_acurio\_v](https://forum.dynare.org/u/veronica_acurio_v)\
**Post date:** [25 January 2023 10:55 UTC](https://forum.dynare.org/t/monthly-parameters-calibration-from-quarterly-values/21823/1 "2023-01-25T10:55:15Z")

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Hello,

For most of the parameters, it is easy to find the equivalent monthly calibration of quarterly calibration. However, I’m having problems with the transformation of 2 parameters : the habit formation (h) and the adjustment cost in investment (\kappa).

For the first the quarterly equation is:

U(C\_t (j)) = log(C\_t(j) - hC\_{t-1}(j))

For the second one the equation is:

f\left(\frac{I\_t}{I\_{t-1}}\right)= \frac{\kappa}{2}\left( \frac{I\_t}{I\_{t-1}} - 1\right)^2

Usually, quarterly calibration of these values are h=0.7 and \kappa=5. Any ideas which are the equivalent of those for a monthly calibration?

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [28 January 2023 20:11 UTC](https://forum.dynare.org/t/monthly-parameters-calibration-from-quarterly-values/21823/2 "2023-01-28T20:11:34Z")

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1. The habit parameter is akin to an autocorrelation. So when going to monthly data, I would expect something like the third root, i.e. about 0.9 for 0.7 in quarterly data.
2. You may want to have a look at  
[Investment adjustment costs in annual frequency](https://forum.dynare.org/t/investment-adjustment-costs-in-annual-frequency/16047)

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**Author:** ![siriy](https://forum.dynare.org/letter_avatar_proxy/v4/letter/s/a6a055/32.png) [@siriy](https://forum.dynare.org/u/siriy)\
**Post date:** [9 October 2024 15:12 UTC](https://forum.dynare.org/t/monthly-parameters-calibration-from-quarterly-values/21823/3 "2024-10-09T15:12:52Z")

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Hello. How about inflation indexation? Should I take the third root as well since it is vaguely a persistence-related parameter. Do you have any suggestions? Thank you.

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [9 October 2024 16:14 UTC](https://forum.dynare.org/t/monthly-parameters-calibration-from-quarterly-values/21823/4 "2024-10-09T16:14:37Z")

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Usually, yes.