Optimal Simple Rule in matlab

Hello community,

I wanted to ask if someone could help me with optimal simple rule in Matlab.

I only did OSR in dynare before with the OSR command but now iam doing a bounded rationality model. I need an algorithm to find the optimal value of the parameters of the Rule.

Best regards Farah

[Jan]

An internet search engine finds a very small number of links for the term "optimal simple rule", so maybe your problem is such specific, that the community needs more details.

[Farah Shahpoor]

yh exactly! I couldn´t find find anything about optimal simple rules in matlab.

Sure, I will give you some more details.

I have a new keynesian system with:

Philips curve, Demand curve and interest rate. The agents have heterogenous expectations. So the system is not forward-looking anymore as in the usual model.

you can use a simple taylor rule as an OSR e.g

i= x*gamma_x+ pi*gamma_pi

x= output

pi= inflation

The optimal simple rule problem is to minimize a quadratic loss function. And the algorithm I`m looking for must find the optimal value of parameters gamma_x and gamma_pi.

[Jan]

@Farah: These terms are meaningful for people working in exactly your field of science: keynesian system, Philips curve, Demand curve, interest rate, agents, heterogenous expectations, not forward-looking. I do not know, what the "usual model" is also.

Usually the meaning of the values is does not matter, because Matlab treats them as numbers or functions only. Then explaining the problem or the solution should not depend on the meaning also. Maybe all you want to do is to solve an optimal control problem. If you explain the question in such an abstract level, your chances to get an answer, will grow.

[Farah Shahpoor]

Okay, I will try it again.

I have a system of equations

I have a minimzing problem. I want to minimize a quadratic function.

One equation of the system is defined as the control variable of the system. This equation includes two parameters, for which I need the optimal values of it.

I ´m looking for an algorithm that finds the optimal value to minimize the quadratic function.

For example: I give matlab two starting points for these two parameters and the algoirithm gives me the optimal value for the minimzig problem