Non linear DSGE and impulse-response

General DSGE Modeling
1

I’m sorry about the easy question in advance.

I set my Non-linear DSGE model and want to get impulse-response results, but I’m not sure how I can explain my results.

I would like to get the results as follows ( 1), 2) )

  1. “when eps_R shock is 1%P, “variable q” increases/decreases by xxx% in the m period.”
  2. “when eps_R shock is 1%P, “variable q” deviated from the steady state by 2% in the m period”

so I made new variable “log_q” ,
but when I see the plot, I’m not sure I can interpret the result as (1) or (2), and the value didn’t revert to 0.

mycode_7ln.mod (4.6 KB)

thank you for your help in advance.

2

Your model has a unit root. That explains why some variables do not return to steady state.
Apart from that, having the dependent variable in logs and the shock in logs should give you the desired interpretation.