# Question about correction/constant

**URL:** <https://forum.dynare.org/t/question-about-correction-constant/2905>\
**Category:** Dynare help (legacy posts)\
**Created:** [7 January 2013 22:59 UTC](https://forum.dynare.org/t/question-about-correction-constant/2905 "2013-01-07T22:59:59Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![dsgeapprox](https://forum.dynare.org/letter_avatar_proxy/v4/letter/d/a9a28c/32.png) [@dsgeapprox](https://forum.dynare.org/u/dsgeapprox)\
**Post date:** [7 January 2013 22:59 UTC](https://forum.dynare.org/t/question-about-correction-constant/2905/1 "2013-01-07T22:59:59Z")

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Hi,  
I have a question about the correction term in my second order approximation. I have a model with stochastic volatility that I am trying to approximate. The model has an error term that is being multiplied by an endogenous variable. The endogenous variable follows a log AR(1) process with a shock. When I use the approximation in Dynare, I find that changing the variance of the shock to the AR(1) process does not change the correction term. When I calculate the correction term on my own, I find that the correction term changes as the variance changes. Am I making a mistake in my coding in Dynare, or is the result I am getting correct in Dynare? (It’s entirely possible that my calculation is correct.)

I have attached a mod file with a simplified version of my code. The “sig” variable is allowed to change over time when there are shocks to “u.” When I change the variance of “u” (in line 27) I don’t find that the correction term (and therefore the constant) for the approximation to “y” does not change like when I calculate this on my own. In this case, with var u=2, by my calculation the correction should be 1.4923 instead of 0.206612. I am wondering if I have a problem in my coding in the .mod file or if this is a type of model that isn’t supported by Dynare or if this is indeed correct and my calculation is incorrect. Any help is appreciated.

Thanks in advance  
[simplesv.mod](https://forum.dynare.org/uploads/default/original/2X/e/e6a1433e24bcea82f0a8e8951dad77e6b4d1f0b7.mod) (371 Bytes)

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**Author:** ![dsgeapprox](https://forum.dynare.org/letter_avatar_proxy/v4/letter/d/a9a28c/32.png) [@dsgeapprox](https://forum.dynare.org/u/dsgeapprox)\
**Post date:** [25 July 2013 17:57 UTC](https://forum.dynare.org/t/question-about-correction-constant/2905/2 "2013-07-25T17:57:11Z")

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Has anyone had a chance to look at this? Any input is appreciated. Thanks.

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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:** [25 July 2013 18:52 UTC](https://forum.dynare.org/t/question-about-correction-constant/2905/3 "2013-07-25T18:52:51Z")

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Could you tell me how you computed the supposed outcome?