I have a question whether shocks block should be used in the estimation mode in Dynare. For example, in Smets-Wouters and Villaverde 2010 (NK_baseline) etc there are multiple shocks. What is the prevailing strategy?
Thanks for advice!
The shocks block is only required if you want to set shock (co-)variances that are not estimated. If all shock (co-)variances are estimated, this block is redundant, but nevertheless recommended as you should always check your model results with stoch_simul before turning to estimation.