Second order approximation and the IRF explosive

[jpfeifer]

A rough outline would be at

Optimal policy parameters in a non-linear model

You need to write an objective function and maximize it. The code for the maximization part to be added to the mod-file would be x_start=[0.01, 0.01, 0.01, 0.01]'; %define parameters to be optimized and their upper and lower bound x_opt_name={'alpha_le',0,Inf 'alpha_qky',0,Inf 'alpha_ve',0,Inf 'alpha_cg',0,Inf }; options_.nofunctions=1; options_.nograph=1; options_.verbosity=0; %set noprint option to suppress error messages within optimizer opti…