Shocks from Base for Rerun and Policy are in .BOT Files

When you solve for any year of the Policy, the policy shocks (those in the .PSH files in the Policy Shocks column on the Closure/Shocks page) are to be applied in addition to any shocks in this year of the Base case.

However, the closure for any year of the Policy may be different from that for the corresponding year of the Base case. So the shock statements from any year of the Base cannot be put unchanged into the Command file used to run the same year of the Policy. Instead, the Command file for this year of the Policy must ensure that

all variables which are to be exogenous in any year of the Policy

are shocked by the same amount as they changed

during the same year of the Base.

For example, suppose that variable x1 was endogenous in the Base but is to be exogenous in the Policy. Then, in order to ensure that x1 reaches the same value in the Policy as in the Base (at least, excluding the extra policy shocks), the Command file for the Policy must include a statement to shock x1 by its endogenous result from this year of the Base.

The .BOT file contains just these shock statements.

Note that RunDynam only produces one .BOT file for each year.

If you are rerunning the Base with Policy closures, RunDynam uses the same .BOT file used for any year of the Rerun and for that same year of the Policy. This is because RunDynam assumes that the closure for any year of the Policy is the same as the closure for the same year of the Rerun. If you have data-dependent sets in your model, you may violate this assumption in certain rare cases.

If you are rerunning the Base with Policy closures, the closure used to produce the .BOT file is based on the data files which are input to the simulation for the same year of the Rerun (not the Policy). This is the correct starting data since each year of the Rerun must produce the same results as for that year of the Base case (at least, as close as possible given that the closures may be different). [This was changed in October 2003. Prior to that, the original data files (as shown on the Model/Data page) were used in the bot job.]

When option Use SOL files for Shocks under the Run Preferences menu is not selected, the .BOT file contains one line for every component of every variable which is exogenous in the Policy closure. [Actually statements with a zero shock are omitted.]

For example, suppose that variable x2 has 3 components which are to be exogenous in the Policy. Then the shock statements in the .BOT file will look like:

Shock x2 1 = 23.56 ;

Shock x2 2 = -18.9 ;

Shock x2 3 = 5.6 ;

When option Use SOL files for Shocks under the Run Preferences menu is selected, the .BOT file contains one shock statement for every vector variable which has at least one component exogenous in the Policy closure. These shock statements say to select the shocks from the relevant header in the .SOL file for the corresponding year of the Base.

For example, suppose that variable x2 has 3 components which are to be exogenous in the Policy. Then the shock statement for this variable in the .BOT file will look like:

Shock x2 = select from file D:\MO\BS1B2002.SOL header 0023 ;

If you Rerun the Base, the shocks in the Command file for any year of the Rerun are just those from the .BOT file.

The shocks in the Command file for any year of the Policy are those in the .BOT file plus the extra policy shocks from the relevant PSH file (those in the Policy Shocks column on the Closure/Shock page).

URL of this topic: www.copsmodels.com/webhelp/rundynam/hc_botfiles.htm

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