I saw someone set combined -1% tech shock and 1% govenment expending shock as compound shocks to simulate a condition of expensionary fiscal policy during a depression. I want to know how to realize this in Dynare.
Actually, I wonder if it is really reasonable to set compound shocks in a DSGE model. In my opinion, IRF is to test how a shock would affect the whole system with other shocks being set to zero. And also, I doubt exogenous shocks could simulate the expensionary fiscal policy during a depression, since I think endogenous variables, e.g. govenment expenditure variable under a tech shock, will be enough to explain. One more exogenous shock at the same time could only make our dynamic general equilibrium model meaningless.
Since the paper I read is not that authoritative, I am not sure whether to believe it or not and seeking a right answer. Thanks in advance.