Hello everybody,
I’m kind of a newbie in working with dynare (started like two months ago) and I kinda got stock with the shock_decomposition command and its implementation with dynare 4.1.
I figured out that I have to use it after the estimation command in the form of "shock_decomposition; " if i want dynare to decompose all the variables in the same order they are specified in the var block. If I give it the command “shock_decomposition y;” then it will only do it for variable y.
My problem is that it takes all the shocks from the varexo block (this time from the button up). And there I have measurement shocks which I am not interested in, because they are very close to 0 (and eliminate them so the important shocks can better be seen). How can I select only the shocks that I am interested in ?
Many Thanks !!!