Hi All, I’m trying to compare the welfare properties of different policy rules in a version of the Gertler and Karadi (2011). In all of my model specifications I’m able to include a Welfare variable such that Welf = U(c,l) + beta*Welf(+1) , so I can directly see the welfare response for given e…

Please use the unstable version. I don’t get a maxit problem there By design, it is not possible with Ramsey to have the welfare definition in the model and as the objective as in that case, you have the objective function again as a constraint. That will introduce a singularity. You have to drop t…

Thanks for recommending to use the unstable version, now I don’t run into a maxit problem. Regarding performance, when I set the policy objective function in the ramsey model to maximize welfare, then I assess the model performance on the Welfare IRF for some shocks. As we cannot include a Welfare …

Welfare analysis is not my strong suit, thus the late reply. Is it necessary that the Ramsey policy yields higher welfare as a response to every single shock? Alternatively, could it be that Ramsey is computed around a wrong steady state? There may be multiple ones.

Hi Professor Johannes, I have a similar question abou Ramsey Policy and Welfare computation. I have a Non-linear model open economy NK model with four shocks written in two files: In file Ramsey1.mod I calculate the ramsey_policy() within this environment. In Rule1.mod I calculate the welfare und…

This problem is tricky. You cannot add the welfare function in mod-file under Ramsey as it would cause singularity. But unfortunately, evaluate_planner_objective does not return the appropriate planner value at higher order. So there is currently no good way to do this. It is still on our to-do-list…

Greetings, I was wondering if this is now possible? Compute ramsey policy and compare welfare losses under alternative polices (IT, Peg). Thanks

See [image] Oo_.planner_objective_value Optimal Policy Hi Ippei, in your previous post, there shouldn’t be any u(t) because u(t) is observed at the beginning of the period and belongs by assumption to the information set of E_t() If you want the unconditional welfare (a …

Hi all, I have a similar problem as bvajda’s first point: If I include the utility function for households in planner_objective, dynare will run into a ‘maxit’ problem. What did you mean by using the stable version? What is meant by ‘stable version’?

Using Dynare 6 or later should not have the original issue. If the problem is present there, you may want to provide your files.

Hi, if I use the codes from bvajda from above and adapt them to the currect Ramsey syntax, they run fine, when I statae planner_objective (log(exp(Cf))-chi*(exp(Lf))^(1+varphi)/(1+varphi)); However, if I create an extra variable “util” and define in the model block util= (log(exp(Cf))-chi*(exp(L…

Welfare comparison with Ramsey optimal policy

Optimal Policy

jpfeifer 17 September 2020 09:19 8

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