From 0d8fce08478d7d556c1d7b52b2a749aba8de093b Mon Sep 17 00:00:00 2001 From: Johannes Pfeifer Date: Tue, 22 Oct 2013 11:20:05 +0200 Subject: [PATCH] Improve on documentation regarding treatment of predetermined variables --- doc/dynare.texi | 14 ++++++++++++++ 1 file changed, 14 insertions(+) diff --git a/doc/dynare.texi b/doc/dynare.texi index 0382dcf78..09bfdae20 100644 --- a/doc/dynare.texi +++ b/doc/dynare.texi @@ -1166,6 +1166,20 @@ are supposed to be decided one period ahead of all other endogenous variables. For stock variables, they are supposed to follow a ``stock at the beginning of the period'' convention. +Note that Dynare internally always uses the ``stock at the end of the period'' +concept, even when the model has been entered using the +@code{predetermined_variables}-command. Thus, when plotting, +computing or simulating variables, Dynare will follow the convention to +use variables that are decided in the current period. For example, +when generating impulse response functions for capital, Dynare +will plot @code{k}, which is the capital stock decided upon by +investment today (and which will be used in tomorrow's production function). +This is the reason that capital is shown to be moving on impact, because +it is @code{k} and not the predetermined @code{k(-1)} that is displayed. +It is important to remember that this also affects simulated time +series and output from smoother routines for predetermined variables. +Compared to non-predetermined variables they might otherwise appear +to be falsely shifted to the future by one period. @examplehead The following two program snippets are strictly equivalent.