I put the linearized version of my model into dynare with steady state values as parameters. However, I got confused. Althoug I put “linear” right after the “model” command, when I type stoch_simul(order=2), --or order =1–, does dynare again try to approximate my model?
Thank you so much.
I don’t know exactly how simulation works, but in estimation, I always loglinearize the equations by hand and put them into dynare. In this case, you don’t near “loglinear” as an option.
Thanks for the reply. Actually, what I need to do is just the simulation.
By the way, does anyone know what to put after the “linear” command that we write after the “model” command? For instance, if I linearize to a second order by hand, do I need to define it or dynare automatically figures it out?
if your model is linear, you should specify it in the block model starting by “model(linear)”. Now as regards simulations, if you wanna obtain first or second order approximation of your linear model, you need to add respectively the option “order=1” or “order=2” in the instruction stoch_simul.
hope this helps,