I have a question regarding the proper way of calculating the value of both the unconditional and conditional (upon starting from the steady state) welfare measure. From what I see after browsing similar questions here in the forum, in Dynare the unconditional welfare corresponds to the unconditional ergodic mean of the welfare variable:
By contrast, the conditional welfare criterion (upon starting in the steady state) is given by the constant in the policy and transition functions output that Dynare produces. Guess its interpretation is…the conditional ergodic mean which in a 2nd order approximation is different from the steady state. The way I compute is:
Welfare_con = oo_.dr.ys(Welfare_pos)+0.5*oo_.dr.ghs2(oo_.dr.inv_order_var(Welfare_pos));
Is that right? I am asking since I obtain very weird values for the conditional welfare both in sign and in values as they are very different from the unconditional welfare measure.