Dear Dr. jpfeifer
I have a problem in my DSGE model can you help me?
As it is clear in attached file
ex1.mod (6.6 KB)
ex1.mod (6.6 KB)
The problem is that in implementation contractionary monetary policy shock, inflation is increased and production is decreased, I want to know why this is happened? that’s mean what transmission mechanism is accrued that I implement a positive shock on policy rate but the interest rate itself is decreased although the shock have positive relationship with interest rate.
I am not familiar with your model, so I can only give you the standard advice. Try shutting off features/changing parameters to see whether that changes the result. You seem to have a more complicated financial sector that may change the transmission.