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Remove initialization of TranShkNow #327

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pkofod
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@pkofod pkofod commented Jun 21, 2019

fixes #326

I think it makes no sense to hard-code the initial transitory income shock. If it is super important from a practical point of view, we should simply make the very first distribution a discrete distribution with one point (1.0 ofc). Otherwise the simulations don't really match the model specification.

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mnwhite commented Jun 21, 2019 via email

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pkofod commented Jun 21, 2019

The object ThisType.IncomeDstn[0] is what the solver needs to know for t=0, which is the distribution of income shocks at the start of t=1.

I see your point. The model is solved conditional on the initial condition.

Then why don't we introduce a distribution of initial (t_age = 0) income shocks that is only used in these lines - that is it is only used for simulation. It's not necessary for solve() to run. The default can be IncomeDstnNow[0] for permanent income shocks and degenerate 0 or 1 for the transitory shocks. Optionally, they can be given as T_sim length arrays such that newborns are endowed with initial conditions the evolve as t in the simulations.

I think an explicit "initial shock distribution for simulation" would be both useful and easy to implement.

@llorracc llorracc added the Status: In Progress In Progress and NOT-OK to be merged. label Jul 3, 2019
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pkofod commented Jul 3, 2019

In the talk today, we agree on a solution as sketched above, so I will move forward with that. I'll keep the default as a degenerate "draw" of 1, but allow users to more flexibly control it with a distribution if they want.

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@pkofod what is the status of this?

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Default income shock for newborns
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