Problem with results of welfare analysis

[HelloDynare]

@superj

To the 2nd one, I wonder if it’s meaningful to display this big value of weight on inflation feedback in the paper? Is there any papers have done this before?

@superj

Is it because it’s difficult to achieve such big value in practice? What might be the appropriate upper bound of inflation feedback？

FYI:

Small Variance Value in Ramsey Policy NK Model

Hello, after reviewing your dialogue, I would like to complement just one remark on the following quote: This is not unusual. I read SGU 2006 expanded version. On page 22 footnote 10, they did unconstrained OSR as well, finding a similar pattern: [image] Note the sentence “The associated welfare gain is about one thousandth of one percent…”. I experimented a 3D-diagram of welfare with inputs of \alpha_{\pi} and \alpha_y. The welfare surface is extremely flattened with varying \alpha_{\pi}. …

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Optimal Simple and Implementable Monetary and Fiscal Rules: Expanded Version

and for example, your searching space is located in the following flattened surface: