Hi, I have this equation: PXT = PDT - S + PNB in my model and PNB \sim AR(1). After a PNB shock, I was expecting PXT to go up, but it rather decreased. I am thinking there is some sort of a feedback mechanism in the model causing this. Thus, although the initial impact is positive (as predicted by the equation), there is some feedback mechanism (that I should look for) that is causing an overall decrease in PXT. This is not strange, right? Or is it? Many thanks for the reply.
