# Welfare ranking of monetary/ fiscal rules

**URL:** <https://forum.dynare.org/t/welfare-ranking-of-monetary-fiscal-rules/4467>\
**Category:** Dynare help (legacy posts)\
**Created:** [5 February 2015 22:23 UTC](https://forum.dynare.org/t/welfare-ranking-of-monetary-fiscal-rules/4467 "2015-02-05T22:23:07Z")\
**Posts on this page:** 4\
**Page:** 1

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**Author:** ![tom\_mercer](https://forum.dynare.org/letter_avatar_proxy/v4/letter/t/7feea3/32.png) [@tom\_mercer](https://forum.dynare.org/u/tom_mercer)\
**Post date:** [5 February 2015 22:23 UTC](https://forum.dynare.org/t/welfare-ranking-of-monetary-fiscal-rules/4467/1 "2015-02-05T22:23:07Z")

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Hello friends,

I wish to compare the welfare ranking of different combinations of monetary and fiscal rules for a New Keynesian model. Can Dynare provide welfare numbers to see which combination is the best - or is there some other way?

Thank you,

Tommy

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [9 February 2015 13:38 UTC](https://forum.dynare.org/t/welfare-ranking-of-monetary-fiscal-rules/4467/2 "2015-02-09T13:38:55Z")

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You need to define utility recursively and use a second order approximation. See e.g. [[Welfare and volatilty](https://forum.dynare.org/t/welfare-and-volatilty/4472/2))

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**Author:** ![Ana](https://forum.dynare.org/letter_avatar_proxy/v4/letter/a/a6a055/32.png) [@Ana](https://forum.dynare.org/u/Ana)\
**Post date:** [28 May 2015 00:51 UTC](https://forum.dynare.org/t/welfare-ranking-of-monetary-fiscal-rules/4467/3 "2015-05-28T00:51:55Z")

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Can the model be entered _linearly_ into Dynare to compute this recursive utility?

Also, can someone provide an example code - would like to check if W should be specified as part of the model block or outside.

Thank you,  
Ana

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [31 May 2015 19:48 UTC](https://forum.dynare.org/t/welfare-ranking-of-monetary-fiscal-rules/4467/4 "2015-05-31T19:48:07Z")

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No, in general you cannot use a linear version of this. See my answer at [[Question for jpeifer: Optimal Policy under Committement](https://forum.dynare.org/t/question-for-jpeifer-optimal-policy-under-committement/4723/2)).

Yes, you need to define welfare within the model block.