Welfare cost of business cycles

[jpfeifer]

See

Welfare and Pruning

Thank you for uploading the files. Does it have a particular reason why you calculate conditional welfare based on a simulation instead of calculating the steady state plus the uncertainty correction as described in https://forum.dynare.org/t/welfare-cost-of-business-cycles/3802/12? Is it because you are not actually extracting welfare from the Dynare output, but already the welfare gain/loss in consumption equivalents?

[s.r]

can we calculate ξ in a linear model? should we put a linear form of utility fun. in the linear model?

[jpfeifer]

Yes, one can always compute it. And no, linear utility does not make sense at all.