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Commit b957fd18 authored by Johannes Pfeifer's avatar Johannes Pfeifer
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Document second-order accurate approximation of welfare at order=2

(cherry picked from commit 2c204538)
parent 7a96cc6e
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1 merge request!1948Cherry-pick Ramsey fixes
......@@ -4220,7 +4220,8 @@ Computing the stochastic solution
variance-covariance of the endogenous variables. Contains
theoretical variance if the ``periods`` option is not present and simulated variance
otherwise. Only available for ``order<4``. At ``order=2`` it will be be
a second-order accurate approximation. At ``order=3``, theoretical moments
a second-order accurate approximation (i.e. ignoring terms of order 3 and 4 that would
arise when using the full second-order policy function). At ``order=3``, theoretical moments
are only available with ``pruning``. The variables are arranged in declaration order.
.. matvar:: oo_.var_list
......@@ -10229,7 +10230,8 @@ with ``discretionary_policy`` or for optimal simple rules with ``osr``
At the current stage, the stochastic context does not support the ``pruning`` option.
At ``order>3``, only the computation of conditional welfare with steady state Lagrange
multipliers is supported.
multipliers is supported. Note that at `order=2`, the output is based on the second-order
accurate approximation of the variance stored in `oo_.var`.
*Example (stochastic context)*
......
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