caption: Standard vs robust consumption paths

name: fig-std-vs-robust-paths

---

np.random.seed(0)

rng = np.random.default_rng(0)

T_sim = 100

def simulate_ar1(φ, ν, shocks, mu0=0.0):

path[t] = φ * path[t-1] + ν * ε

return path

shock_path = np.random.randn(T_sim - 1)

shock_path = rng.standard_normal(T_sim - 1)

mu0_init = 10.0

mu_std_path = simulate_ar1(φ_std, ν_std, shock_path, mu0=mu0_init)

mu_rob_path = simulate_ar1(φ_rob, ν_rob, shock_path, mu0=mu0_init)