# What is the difference between the pulse diagram of stochastic simulation and that of perfect foresight simulation?

**URL:** <https://forum.dynare.org/t/what-is-the-difference-between-the-pulse-diagram-of-stochastic-simulation-and-that-of-perfect-foresight-simulation/24008>\
**Category:** Stochastic simulations\
**Created:** [24 October 2023 07:06 UTC](https://forum.dynare.org/t/what-is-the-difference-between-the-pulse-diagram-of-stochastic-simulation-and-that-of-perfect-foresight-simulation/24008 "2023-10-24T07:06:44Z")\
**Posts on this page:** 1\
**Showing post:** 6

<div class="post-metadata">

**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:** [26 October 2023 20:34 UTC](https://forum.dynare.org/t/what-is-the-difference-between-the-pulse-diagram-of-stochastic-simulation-and-that-of-perfect-foresight-simulation/24008/6 "2023-10-26T20:34:27Z")

</div>

Have a look at

> [@Stoch\_simull(order=1) and news shocks](https://forum.dynare.org/t/stoch-simull-order-1-and-news-shocks/6282):
>
> Dear all, I have a stupid and embarrassing question to ask. I let dynare solve my DSGE model by choosing a first order Taylor approximation (i.e. stoch\_simull(order=1,…) ). However, we know that 1st order linearizations yield the certainty equivalence property. Since my model contains news shocks, is there a conflict regarding the approximation number? As we know it is quite complicated to introduce news shocks into perfect foresight models. Many thanks in advance for your help. Best Robert

---

_[View the full topic](https://forum.dynare.org/t/what-is-the-difference-between-the-pulse-diagram-of-stochastic-simulation-and-that-of-perfect-foresight-simulation/24008)._