IRF Output

Dynare help (legacy posts)
1

Hello,

in the attached code I am trying to compute impulse responses for a number of variables, including w, p and w/p. However, whilst the irf for w and p seem to suggest that the ratio should decrease upon impact (for the second shock in the model), the opposite is the case. I could not quite figure out why this is.

A little help would be much appreciated. Thank you very much in advance.
simple_model.mod (2.46 KB)

2

Run the numbers for w/p. They add up:
Second shock
(1.38042+0.001037)/(4.40631+0.002294)-(1.38042)/(4.40631)= 7.2206e-05
First shock
(1.38042-0.0007183)/(4.40631-0.01238)-(1.38042)/(4.40631) = 7.1921e-04