Some basic question for dynare. Thank you

  1. Using “initval” to give s.s value is same as you write all the s.s equation before the “model” right?
  2. After we define the parameters we need to give a value to each parameter or just some of them?
  3. under bayesian estimation, we dont have to set prior for every parameters, so how should we decide which one need to ?
  1. No, only the initval values are used as starting values for computing the steady state. When we are talking about a linearized model, the variables of the model even become different from the steady state values of the original variables of the nonlinear model, making the two completely different.
  2. You should always have a fully calibrated model first. See Remark 2 (Using stoch_simul before Estimation) in Pfeifer(2013): “A Guide to Specifying Observation Equations for the Estimation of DSGE Models” sites.google.com/site/pfeiferecon/Pfeifer_2013_Observation_Equations.pdf.
  3. In Bayesian estimation you need a prior for every parameter.