A software platform for handling a wide class of economic models.
Dynare is a software platform for handling a wide class of economic models, in particular dynamic stochastic general equilibrium (DSGE) and overlapping generations (OLG) models. The models solved by Dynare include those relying on the rational expectations hypothesis, wherein agents form their expectations about the future in a way consistent with the model. But Dynare is also able to handle models where expectations are formed differently: on one extreme, models where agents perfectly anticipate the future; on the other extreme, models where agents have limited rationality or imperfect knowledge of the state of the economy and, hence, form their expectations through a learning process. In terms of types of agents, models solved by Dynare can incorporate consumers, productive firms, governments, monetary authorities, investors and financial intermediaries. Some degree of heterogeneity can be achieved by including several distinct classes of agents in each of the aforementioned agent categories.
Dynare offers a user-friendly and intuitive way of describing these models. It is able to perform simulations of the model given a calibration of the model parameters and is also able to estimate these parameters given a dataset. In practice, the user will write a text file containing the list of model variables, the dynamic equations linking these variables together, the computing tasks to be performed and the desired graphical or numerical outputs.
A large panel of applied mathematics and computer science techniques are internally employed by Dynare: multivariate nonlinear solving and optimization, matrix factorizations, local functional approximation, Kalman filters and smoothers, MCMC techniques for Bayesian estimation, graph algorithms, optimal control, etc. References to the literature can be found here.
Various public bodies (central banks, ministries of economy and finance, international organisations) and some private financial institutions use Dynare for performing policy analysis exercises and as a support tool for forecasting exercises. In the academic world, Dynare is used for research and teaching purposes in postgraduate macroeconomics courses.
We are pleased to announce the release of Dynare 7.1.
This maintenance release fixes various bugs.
The Windows, macOS, MATLAB Online and source packages are available for download at the Dynare website.
This release is compatible with MATLAB versions ranging from 9.8 (R2020a) to 26.1 (R2026a), and with GNU Octave versions ranging from 8.4.0 to 11.1.0 (NB: the Windows package requires version 11.1.0 specifically).
Here is a list of the problems identified in version 7.0 and that have been fixed in version 7.1:
Heterogeneity:
Complementarity conditions present in the model(heterogeneity=…) block were interpreted with the wrong sign (i.e. the sign opposite to what the documentation says).
Aggregate variables that only appeared in the heterogeneous model block were not detected as present in the model.
The conditional_forecast command on an estimated model would not correctly update the parameter vector.
OccBin:
With two constraints, OccBin would crash if max_check_ahead_periods option is finite.
The PKF smoother would crash if the decision rules need to be recomputed.
The relaxation algorithm would crash if a parameter draws produced a single-period binding regime.
Shock decomposition would crash if the smoother entered a periodic regime loop.
The contemp_reduced_form option of the sbvar command was broken.
In a shock_paths block, the syntax self.EXOGENOUS_NAME would not work when referring an exogenous variable declared in a previous shock_paths block.
As a reminder, the list of new features introduced in versions 7.x can be found in the release notes for 7.0.
