From c08b4edb38ed611a20a71f4ef117e5ffc5f6b5de Mon Sep 17 00:00:00 2001
From: =?UTF-8?q?St=C3=A9phane=20Adjemia=20=28Scylla=29?= <stepan@dynare.org>
Date: Wed, 26 Dec 2018 11:49:04 +0100
Subject: [PATCH] Fixed the explanation about perturbation solution.
---
src/source/the-model-file.rst | 19 ++++++++++---------
1 file changed, 10 insertions(+), 9 deletions(-)
diff --git a/src/source/the-model-file.rst b/src/source/the-model-file.rst
index 3c5e22807f..647e4a1317 100644
--- a/src/source/the-model-file.rst
+++ b/src/source/the-model-file.rst
@@ -2818,15 +2818,16 @@ Computing the stochastic solution
perturbation techniques.
More precisely, ``stoch_simul`` computes a Taylor approximation of
- the decision and transition functions for the model. Using this,
- it computes impulse response functions and various descriptive
- statistics (moments, variance decomposition, correlation and
- autocorrelation coefficients). For correlated shocks, the variance
- decomposition is computed as in the VAR literature through a
- Cholesky decomposition of the covariance matrix of the exogenous
- variables. When the shocks are correlated, the variance
- decomposition depends upon the order of the variables in the
- ``varexo`` command.
+ the model around the deterministic steady state and solves of the
+ the decision and transition functions for the approximated
+ model. Using this, it computes impulse response functions and
+ various descriptive statistics (moments, variance decomposition,
+ correlation and autocorrelation coefficients). For correlated
+ shocks, the variance decomposition is computed as in the VAR
+ literature through a Cholesky decomposition of the covariance
+ matrix of the exogenous variables. When the shocks are correlated,
+ the variance decomposition depends upon the order of the variables
+ in the ``varexo`` command.
The Taylor approximation is computed around the steady state (see
:ref:`st-st`).
--
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