Variance Decomposition

Stochastic simulations
21

[quote=“jpfeifer”]In my mod-file, there is a stoch_simul(loglinear) before

This implies that the loglinear option is already set when estimation is run. If you don’t do this, the estimation will not be using the loglinear option. I updated the Garcia-Cicco, Pancrazi and Uribe (2010) mod-file to make explicit that you would need to set that option explicitly.[/quote]

Thanks, Johannes.
I guess I try to clarify that I follow the estimation and simulation exactly in your way. After following this estimation command (simulation with log linear is specified), I got the variance decomposition from this estimation. After the estimation, I also put the poseterior mean into simulation with log linear command and find that two variance decomposition are pretty inconsistent. Again,my question is can this inconsistency be explained?

22

Does your posterior look approximately normal? Because estimation is going to provide the mean decomposition, not the decomposition at the mean. Those two objects can be very different if the distribution looks funny.

23

Thanks Johannes. I understand your suggestion!

25

So maybe the two monetary regimes have the same economic consequences. You are the model builder and should have an intuition on what is going on in your model.