IRF matching procedure

Dear Professor Pfeifer,

I was interested in the IRF matching procedure you have uploaded on your GitHub. I have used your code and your RBC model applied to Italian Data (Consumption, Output, Investment and Government spending) from 2007-2020 and it works well.

However, I tried your code on a more complex model (Kirchner & Wijnbergen (2016)) downloaded on the Macro-model data base that I have pimped a bit (Usefull public spending and Non Ricardian household) in order to get a positive response in consumption.

When I use this new model the IRFs for output Public spending and consumption start oscillating although this is not the case for standard IRFs produced by dynare .

I do not understand why the same code works for one model but not for the other one?

my guess is that it is due to the estimation of the AR(2) 's parameters? (24.2 KB)

Please find attached the different files I have used

It seems the reason is that your empirical IRFs are oscillating and the model now mirrors that.