Saturday, October 24, 2009


Dynare is an add-on to MATLAB or Octave that permits the solving and analysis of general equilibrium models in an extremely simple fashion - it takes as inputs the first-order conditions and spits out impulse-response functions, correlations and autocorrelations, business cycle volatilities, etc. I use it often as a shortcut instead of having to code the value function iteration/interpolation myself, but it doesn't really let one off the hook from the economics, because one still needs to solve for the Euler equation, the labour-leisure tradeoff, etc.

Just trying to advertise, it should be more well-known than it is.


Gabriel said...

Yes, it's really good, and it will do deterministic models too, with fully expected changes, like one would do in fiscal analysis.

Also, it deals with nonstationarity.

I just don't like the fact that its BVAR features are not all that transparent.

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