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  {\Large DYNARE COURSE}\\
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Application 1
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\section*{Exercises}
\begin{enumerate}
\item \verb+simple.mod+
\begin{enumerate}
\item Run \verb+simple/simple.mod+. If something isn't working, it must be a problem with Dynare installation. Ask for help.
\item Look at the content of \verb+simple.m+, \verb+simple_static.m+, and \verb+simple_dynamic.m+.
\item Add an option to \verb+stoch_simul+ so as to only see the useful part of the IRFs.
\item Modify the value of the parameters one at the time and observe the changes on 
  \begin{enumerate}
  \item the reduced form coefficients,
  \item the moment of the endogenous variables,
  \item the IRFs.
  \end{enumerate}
\item Identify $inf_{t-1}$ in \verb+simple1_static.m+ and in \verb+simple1_dynamic.m+
\item Check by hand the derivative of the third equation with respect to \verb+inf_t+ in \verb+simple1_dynamic.m+ 
\end{enumerate}
\item Dynare syntax

In the \verb+syntax+ subdirectory, each of the files \verb+a1.mod+,\ldots, \verb+a8.mod+ and \verb+b1.mod+,\ldots, \verb+b5.mod+ contains one, or rarely two, syntax mistakes. Find them. When you find a mistake, but don't know how to correct, look into the other files. They are all variations on a same theme.

\item Perform forecasting experiments in model \verb+simple1.mod+ using the information contained in the slides that wasn't covered this morning.
\item Try a forecast starting from the steady state. Are you surprised by the outcome?

\item Try to modify \verb+fs2000A.mod+ in order to obtain the portfolio adjustment cost model (see papers by Schorfheide and by Nason and Cogley)

\end{enumerate}

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