Welfare analysis

Hi everyone,
Does any of you know if one can conduct welfare analysis in Dynare? In particular, I am interested in replicating the exercises implemented in page 8 of the attached paper.
Many thanks in advance for your responses.
housing prices capital inflows.pdf (1.15 MB)

Sure. You just need to define the welfare function within the model and do a second order approximation. There are various posts on this.

Thanks Professor Pfeifer

Dear professor jpfeifer,

I have a quick question, Is it possible to perform a welfare analysis in a linear model?
Thanks in advance!


Thank you so much for your answer,
I follow the example of Gali 2015 chapter4.4 for the welfare analysis, but I got the error “Unable to perform assignment because the left and right sides have a different number of elements.”

I really don`t figure out what is the reasoncomplete111.txt (7.8 KB)

When I run your file, the complaint is that the sigma in

            par.omega_pi= sigma/(((1-alpha*beta)*(1-alpha))/alpha);

was not defined.

Thanks a lot professor, now everything goes well!