I am working on a extension of LS2007, but first I want to replicate their model and estimation on Dynare. Even before estimation, I’m trying to replicate their impulse response functions by calibrating the model at the posterior means that they obtain. Well, something is not working out for me to get this done. For instance, comparing the IRF I get to a monetary shock and what they get, it is very clear that there is something off.
Attached is the code. I would really appreciate any comments.
LS2007.mod (4.84 KB)