Dear Dynare users,
I have a, certainly silly question about the interpretation of IRFs.
I have a non-linear model calibrated at a quarterly frequency and solved non-linearly with simul. I would like to simulate a series of shocks (Gas price and cost-push shock) in order to match a given annual GDP decrease.
Let’s say I want to calibrate the shocks in order to match an annual GDP drop of 2%:
-is my target reached if the % deviation is 2% after four quarters?
-or is my target reached if I annualize the % percentage deviation, and the % deviation in the first period is 2%?
-or should I directly annualize the variable in the .mod file?
I hope, I have been clear.
Thanks in advance