The belief system for adaptive learning, also known as the perceived law of motion (PLM), is by default constructed as AR(2) processes with a constant for each forward looking variable. This PLM is known as the naive system in YADA. The user can also construct a so called belief system file with an user determined PLM. This file is a matlab function which accepts certain input variables and provides an output variable that allows YADA to set up the desired PLM. YADA restrict the use of a PLM to have at most two lags and can only include the deterministic variables as well as lags of the state variables in the model.
Additional Information
• | A detailed discussion about the construction of the perceived law of motion in the adaptive learning framework can be found in Section 17.1.2 of the YADA Manual. |
• | An example file is located in the directory "example\AnSchorfheide" directly below the base directory for YADA. The file is simply called "ASBeliefSystemFile.m". |
• | An additional example file can be found in the "SlobodyanWouters" directory in the "example" directory. This file is called "SloWoREStyleBeliefSystemFile.m". |
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