IRFs of Price dispersion is not zero

NK.mod (3.1 KB)


I composed a NK model with capital in it and found that the irfs for my price dispersion is not 0, which I think it should be.

If you run the file you can know what I mean, DC is the price dispersion variable.

Can anyone help me spot any mistake in any place.


That is indeed strange. You should cross-check your model with e.g. DSGE_mod/Gali_2015_chapter_3_nonlinear.mod at master · JohannesPfeifer/DSGE_mod · GitHub