Parameter introduction

Hello. In my model, the variance of one of the model’s endogenous variables is parameter. How can I introduce this variance as a parameter?

Can someone help me?

That statement does not make sense. If it’s an endogenous object, then it will completely depend on the exogenous objects of the model. If you want to fix something like the variance of that endogenous object, you need to make something else endogenous. An example of this is fixing the steady state of hours worked by setting the labor disutility parameter accordingly.

If we want to introduce the variance of an exogenous variable as a parameter, how do we do it?

You can use

parameters sig_e;

varexo epsilon;



var epsilon; stderr 1;