IRF in response to joint contemporaneous shock

Dear All,

I am having issues with generating IRF’s in response to a joint shock (at the moment I have 2 shocks in the model: ‘fisc’ and ‘demand’, both with no persistence) under optimal ramsey policy.

BaselineAugm.mod (2.8 KB)

Essentially the idea is to model optimal policy in response to a covid-like joint fiscal-demand shock (I have used arbitrary numbers for the relative variances and correlations at the moment, but wanted to get the code to work first before estimating these more rigorously). I have attached the mod file.

I have read a couple of threads on the issue and the most rigorous way to go about this seems using the simult_ function as in [DSGE_mod/RBC_news_shock_model.mod at master · JohannesPfeifer/DSGE_mod · GitHub]. I have slightly modified the code as I want both shocks to occur simultaneously in period 1.

However, I am getting the following error once I run the code:

Dot indexing is not supported for variables of this type.

Error in BaselineAugm.driver (line 205)
initial_condition_states = repmat(oo_.dr.ys,1,M_.maximum_lag);

Error in dynare (line 281)
evalin(‘base’,[fname ‘.driver’]);

Can someone kindly assist with this?

Many thanks.

You are missing a command like stoch_simul that triggers the actual solution of the model.