When I write the stoch_simul command, what is the difference between specifying periods=1000 as opposed to not specifying this? Is the simulation stochastic in both cases? Also what is the meaning of incorporating hp_filter=100 in the soch_simul command as in
Answers will be greatly helpful.
For the periods statement, see [Periods in stoch_simul)
The hp_filter=100 option tells Dynare to use an HP filter with the smoothing parameter set to 100 (which is unusual). The displayed moments will then be the ones of the filtered variables.