From d60a19ce4943d26393c44b8bb740d95622c54394 Mon Sep 17 00:00:00 2001
From: Johannes Pfeifer <jpfeifer@gmx.de>
Date: Wed, 6 Sep 2023 12:46:41 +0200
Subject: [PATCH] Finish implementation of truncated normal distribution

Closes https://git.dynare.org/Dynare/dynare/-/issues/1593
---
 doc/manual/source/the-model-file.rst | 7 ++++---
 matlab/draw_prior_density.m          | 4 ++--
 matlab/prior_bounds.m                | 8 ++++----
 tests/estimation/fs2000.mod          | 2 +-
 4 files changed, 11 insertions(+), 10 deletions(-)

diff --git a/doc/manual/source/the-model-file.rst b/doc/manual/source/the-model-file.rst
index 6fdcac9ff..86eb7b36a 100644
--- a/doc/manual/source/the-model-file.rst
+++ b/doc/manual/source/the-model-file.rst
@@ -5912,13 +5912,14 @@ observed variables.
     .. option:: PRIOR_3RD_PARAMETER
 
        A third parameter of the prior used for generalized beta
-       distribution, generalized gamma, generalized Weibull and for
-       the uniform distribution. Default: ``0``.
+       distribution, generalized gamma, generalized Weibull, the truncated normal, and for
+       the uniform distribution. Default: ``-Inf`` for normal distribution, ``0`` otherwise.
 
     .. option:: PRIOR_4TH_PARAMETER
 
         A fourth parameter of the prior used for generalized beta
-        distribution and for the uniform distribution. Default: ``1``.
+        distribution, the truncated normal, and for the uniform distribution. 
+        Default: ``Inf`` for normal distribution, ``1`` otherwise.
 
     .. option:: SCALE_PARAMETER
 
diff --git a/matlab/draw_prior_density.m b/matlab/draw_prior_density.m
index c8b77e67f..59a471957 100644
--- a/matlab/draw_prior_density.m
+++ b/matlab/draw_prior_density.m
@@ -54,8 +54,8 @@ switch pshape(indx)
     abscissa = linspace(infbound,supbound,steps);
     dens = density(abscissa,p6(indx),p7(indx),p3(indx));
   case 3% Gaussian prior
-    infbound = norminv(truncprior,p6(indx),p7(indx));
-    supbound = norminv(1-truncprior,p6(indx),p7(indx));
+    infbound = max(p3(indx),norminv(truncprior,p6(indx),p7(indx)));
+    supbound = min(p4(indx),norminv(1-truncprior,p6(indx),p7(indx)));
     abscissa = linspace(infbound,supbound,steps);
     dens = normpdf(abscissa,p6(indx),p7(indx));
   case 4% Inverse-gamma of type 1 prior
diff --git a/matlab/prior_bounds.m b/matlab/prior_bounds.m
index 8749f6818..c4871bc77 100644
--- a/matlab/prior_bounds.m
+++ b/matlab/prior_bounds.m
@@ -93,11 +93,11 @@ for i=1:length(p6)
         end
       case 3
         if prior_trunc == 0
-            bounds.lb(i) = -Inf;
-            bounds.ub(i) = Inf;
+            bounds.lb(i) = max(-Inf,p3(i));
+            bounds.ub(i) = min(Inf,p4(i));
         else
-            bounds.lb(i) = norminv(prior_trunc,p6(i),p7(i));
-            bounds.ub(i) = norminv(1-prior_trunc,p6(i),p7(i));
+            bounds.lb(i) = max(norminv(prior_trunc,p6(i),p7(i)),p3(i));
+            bounds.ub(i) = min(norminv(1-prior_trunc,p6(i),p7(i)),p4(i));
         end
       case 4
         if prior_trunc == 0
diff --git a/tests/estimation/fs2000.mod b/tests/estimation/fs2000.mod
index f584d3ce9..82ea58e95 100644
--- a/tests/estimation/fs2000.mod
+++ b/tests/estimation/fs2000.mod
@@ -70,7 +70,7 @@ estimated_params;
 alp, beta_pdf, 0.356, 0.02;
 bet, beta_pdf, 0.993, 0.002;
 gam, normal_pdf, 0.0085, 0.003;
-mst, normal_pdf, 1.0002, 0.007;
+mst, normal_pdf, 1.0002, 0.007,1.0002-3*0.007,1.0002+3*0.007;
 rho, beta_pdf, 0.129, 0.223;
 psi, beta_pdf, 0.65, 0.05;
 del, beta_pdf, 0.01, 0.005;