function log_prior_val=Gali_2015_prior_restrictions(M_, dr, endo_steady_state, exo_steady_state, exo_det_steady_state, options_, dataset_, dataset_info); % function prior_val=Gali_2015_prior_restrictions(M_, dr, endo_steady_state, exo_steady_state, exo_det_steady_state, options_, dataset_, dataset_info); % Example of a _prior_restrictions-file automatically called during % estimation % It imposes a prior of the slope of the New Keynesian Phillips Curve of % 0.03. As the slope is a composite of other parameters with independent % priors, a separate function is required to do this. % Copyright © 2021-2023 Dynare Team % % This file is part of Dynare. % % Dynare is free software: you can redistribute it and/or modify % it under the terms of the GNU General Public License as published by % the Free Software Foundation, either version 3 of the License, or % (at your option) any later version. % % Dynare is distributed in the hope that it will be useful, % but WITHOUT ANY WARRANTY; without even the implied warranty of % MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. See the % GNU General Public License for more details. % % You should have received a copy of the GNU General Public License % along with Dynare. If not, see . % read out parameters to access them with their name NumberOfParameters = M_.param_nbr; for ii = 1:NumberOfParameters paramname = M_.param_names{ii}; eval([ paramname ' = M_.params(' int2str(ii) ');']); end Omega=(1-alppha)/(1-alppha+alppha*epsilon); lambda=(1-theta)*(1-betta*theta)/theta*Omega; %defined on page 61 kappa=lambda*(siggma+(varphi+alppha)/(1-alppha)); %defined on page 63 prior_mean=0.03; prior_std=0.02; log_prior_val=log(normpdf(kappa,prior_mean,prior_std));