# IRF of monetary shock

**URL:** <https://forum.dynare.org/t/irf-of-monetary-shock/11055>\
**Category:** Stochastic simulations\
**Created:** [29 November 2017 19:53 UTC](https://forum.dynare.org/t/irf-of-monetary-shock/11055 "2017-11-29T19:53:37Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![Leonid\_65](https://forum.dynare.org/letter_avatar_proxy/v4/letter/l/85e7bf/32.png) [@Leonid\_65](https://forum.dynare.org/u/Leonid_65)\
**Post date:** [29 November 2017 19:53 UTC](https://forum.dynare.org/t/irf-of-monetary-shock/11055/1 "2017-11-29T19:53:38Z")

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Hi Prof. Pfeifer and to all,  
I’m working on a regional dsge model. Variables and parameters with the index f refer to the rest of the country. Without this index - to the current region.  
My problem is, when I look at the irf of xi\_rf (the positive monetary shock in standard Taylor rule, rf- the nominal interest rate) , I would expect that when xi\_rf rises C (consumption) and I (investment ) will fall. But the opposite is the case (they also rise).  
PLEASE WHERE IS THE MISTAKE?? The zip file includes the mod, irf and  
data files. I really appreciate any help you can provide.  
[region.zip](https://forum.dynare.org/uploads/default/original/2X/b/beb326beb5744f4496831ba05e5ea9ad3e0b4985.zip) (34.8 KB)

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [1 December 2017 08:15 UTC](https://forum.dynare.org/t/irf-of-monetary-shock/11055/2 "2017-12-01T08:15:09Z")

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I am afraid I cannot really help you here. You need to check your model again. Ideally, start from a simpler version and check where the “problem” comes from. There may actually be an economic reason for what you see. But you as the model builder are the only one who can judge that.

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**Author:** ![Leonid\_65](https://forum.dynare.org/letter_avatar_proxy/v4/letter/l/85e7bf/32.png) [@Leonid\_65](https://forum.dynare.org/u/Leonid_65)\
**Post date:** [1 December 2017 12:49 UTC](https://forum.dynare.org/t/irf-of-monetary-shock/11055/3 "2017-12-01T12:49:18Z")

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Dear Pfeifer,  
Thanks for help!