I have a complicated NK model implemented into dynare in levels (no growth trend, no exp() function; it is as straughtforward and “vanilla” as possible). Steady-state (using initval) comes out perfect; hits all targets. I use stoch_simul command and this implies that IRFs and model output is in abso…

Yes, the loglinear option divides all variables by their steady state value, expressing everything in percent from the base level. Yes, that will apply to interest rates as well. If the model has a net interest rate, you will have percentage deviations from the net level, which is usually undesirab…

Thanks, Johannes. Is there any way to remedy #2 in the models equilibrium equations? Can I just multiply the IRF value for the interest rates by their steady state values? If so, is it possible to perform a similar conversion to the models simulation output somewhere so that the estimation makes se…

Have a look at [image] Question about understanding irfs in dynare Stochastic simulations To be more precise: it depends on how the variables in your model are measured. As @stepan-a says, Dynare conducts a linearization. If you for example have a nonlinear …

I went through the model and changed the net interest rates into gross interest rates where it was obvious it could be done. Some parts of the model required a little more work to make it happen. It runs the exact same, and the steady-state target unaltered. All of the IRFs are as they were before, …

Sigh...same tired old question about observation equations and models

Estimation ML/Bayesian estimation

jpfeifer 3 March 2026 13:50 4

Have a look at