A model of oil shock

Dear Professor Jpfeifer,
I am currently working on a model of banking instability in oil-exporting countries. The model is a small open economy with floating exchange rates. The problem is when we feed the model with an oil shock, the variables do not really respond to the shock or they do not revert to the steady state (they are converge but apparently in very long time). I was wondering if you could advise me what this situation is telling and how we can deal with that?
The file is attached. Thank you for your great help. Parameters_1.mat (2.1 KB)
steady_state_oil.mat (3.2 KB)
Oil_h_3.mod (13.5 KB)


I don’t really see your problem. The IRFs are persistent, but not unusually persistent. Regarding the size of the IRFs, you need to think about the economic intuition and why the response is not bigger. It has either to do with the initial shock size or the unsufficient propagation.