Deterministic simulations with a fixed variable

I have a question, using the model of Lubik and Schorfheide (2007), I would like to simulate external shocks for 4 periods, but that the interest rate of the monetary policy does not react to these shocks, that is to say that it remains fixed, in one case only during the 4 periods and in another during the whole simulation period.

Does anyone have any idea how to do that in dynare?

Best regards

ls2003_det.mod (3.2 KB)

If a variable does not respond to shocks (because you have fixed it and not because it is a feature of the model, for example, monetary policy shocks have no effect on real variables in RBC model), then the fixed variable is essentially an exogenous variable, right? So interest rate is exogenous for 4 periods and endogenous afterwards? Not sure of this one.

But if you want interest rate fixed for the whole simulation period, maybe you can declare it as an exogenous variable like productivity in varexo block.

Thank you very much for your comment, but I would really like to keep the interest rate fixed for some periods, and then react to the shock.

What is the information structure you have in mind? Perfect foresight? Note that a pegged interest rate generally implies indeterminacy. Search the forum, e.g. Forward guidance shock

Thank you very much for the answer, with respect to the structure, I was thinking of a deterministic simulation, in a case where the central bank observes external shocks, but does not react thinking that it would not be necessary, but after four quarters it reacts, albeit belatedly.

Now thinking, not within this model, if there were fiscal policy, there could be a lack of coordination, where one does not react to external shocks thinking that the other would react.
To do these simulations, I need to turn off the monetary policy reaction, but then turn it on again.

Best regards,

In that case, you can define an exogenous indicator that premultiplies the Taylor rule. If it’s 1, the Taylor rule is operative, if it’s 0 there is a peg.