Hi Johannes,

When you have a minute, I have two related questions based on comparisons between the solution provided by Dynare’s perturbations and a projection method I am doing for one of my papers. As we are aware, second order perturbations can lead to explosive simulations. Although I can compute the cross correlations of my simulated endogenous variables produced by the stoch_simul command, when I try to simulate starting from the steady state (not using the simulated values Dynare automatically produced) in order to compute the Euler residuals, I encounter an explosive solution. Therefore, I was using the pruning technique suggested by Fernandez. In particular, it looked like:

stoch_simul(periods=1000, drop=200, solve_algo=0, order=2, nograph, noprint);

simulations=pruning_abounds(M_,options_,order=2,‘kim_et_al’);

However, upon that format and other alterations, I could not get it to work. I looked extensively online, but no sample code seems to exist publicly. What should I change to prune my second order perturbation?

Related to that, are you aware of documentation on computing Euler residuals? I have a method where I essentially construct the equations as they are articulated in Judd’s paper, but I was interested in comparing if there’s other code available. I saw some material from Wouter Den Haan, but it’s hard to read without a pdf of the model and what each line of code is derived from.

Thank you as always for your help!