Can anybody help me with finding out whether Dynare can compute impulse responses of variables as a percentage of the variables’ own steady state values? If so, what is the option that I need to use for the stoch_simul command?
By default, Dynare only compute linearizations and IRFs are in absolute deviations from steady state. For ways around this, see Section 4.4 “Linearization vs. Log-linearization” and Remark 17 (Dynare’s loglinear option) in sites.google.com/site/pfeiferecon/Pfeifer_2013_Observation_Equations.pdf
If you go for the loglinear option, you must use the recent unstable version (or for future reference anything above 4.4.1). The reason is a bug in this option in 4.4.1 that has only recently been fixed.
Thank you! This response and the document provided were very helpful.