I want to give a negative shock straight to the interest rate, as a discretionary policy. Not changing the monetary base, but emulating a rule from the central bank.
The questions are:
Shall I make “i” completely exogenous or give a shock to the Taylor Rule?
How do I give negative monetary shocks in a basic DSGE NK model from Galí (2008)?
DragoT.mod (3.3 KB)