From 2bc72e77df862a88604f743b4a8fe52f4d6194e3 Mon Sep 17 00:00:00 2001
From: Johannes Pfeifer <jpfeifer@gmx,de>
Date: Tue, 3 Dec 2013 15:02:09 +0100
Subject: [PATCH] Document treatment of parameters in steady state files
 (cherry picked from commit 323bfaf353b1f511ba9a8c4cf8fe789a8503ce2c)

---
 doc/dynare.texi | 14 ++++++++++++++
 1 file changed, 14 insertions(+)

diff --git a/doc/dynare.texi b/doc/dynare.texi
index e99a1f93b4..8c26ad0f75 100644
--- a/doc/dynare.texi
+++ b/doc/dynare.texi
@@ -2857,6 +2857,20 @@ of a heavier programming burden and a lesser efficiency.
 
 @end itemize
 
+Note that both files allow to update parameters in each call of 
+the function. This allows for example to calibrate a model to a labor 
+supply of 0.2 in steady state by setting the labor disutility parameter 
+to a corresponding value (see @file{NK_baseline_steadystate.m} in the 
+@file{examples} directory). They can also be used in estimation 
+where some parameter may be a function of an estimated parameter 
+and needs to be updated for every parameter draw. For example, one might
+ want to set the capital utilization cost parameter as a function 
+of the discount rate to ensure that capacity utilization is 1 in steady 
+state. Treating both parameters as independent or not updating one as 
+a function of the other would lead to wrong results. But this also means 
+that care is required. Do not accidentally overwrite your parameters 
+with new values as it will lead to wrong results.
+
 @anchor{steady_state_model}
 @deffn Block steady_state_model ;
 
-- 
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