Negative shock to productivity & capital always increases

Stochastic simulations
1

Hi
Why despite the negative shock to productivity, capital always increases in my model?

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Have I coded the investment equations correctly?

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image942×275 8.68 KB

Of course, my other equations that have capital are slightly different from the standard models
withtaylorandspreadtimngvagheandorost.mod (4.9 KB)

Thank you in advance for your help

2

Please do not open up multiple questions regarding the same model, you have not even answered my question on your last post. You have a unit root in your model. If you increase the irf-length you see that capital never moves back to steady state.

3

Also, the response is tiny with 10^(-10). So something must be wrong.