Hi,

I apologize if this questions has been asked before or if it is trivial. I do not understand what the “THEORETICAL MOMENTS” produced by stoch_simul are.

For reference, I am trying to understand Sims’ tutorial here. I’ve attached the code.

Are the “theoretical moments” the moments from a simulation? If so, how do I access (e.g. plot) this simulation? (Is it the same simulation Sims references?) Are they the moments of the series under the impulse response?

Perhaps this is the essence of my question: If I run a simulation of the model (see the Sims tutorial), should the moments of the simulated series be approximately equal to the theoretical moments?

[size=85]For context, if it helps at all, my goal is:

- simulate the basic New Keynesian model under three different interest rate rules
- examine the variance of inflation/output gap in the simulated models under each interest rate rule

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Thanks so much!

– BH

Sims.mod (2.38 KB)