This IRFs seem to follow the movement of the price of capital Q_t. It could be a timing error, but it could also be due to the movement of the real interest rate. Have you tried different Taylor rule parameterizations?
This IRFs seem to follow the movement of the price of capital Q_t. It could be a timing error, but it could also be due to the movement of the real interest rate. Have you tried different Taylor rule parameterizations?