I’m trying to compute optimal parameters for the monetary policy rule. For that purpose I used osr command (optimal simple rule) which produced after about 30 iterations “optimal” parameter values (I used a standard loss function with monetary authority minimizing the variance of inflation and output gap).
The problem is that these optimal parameters influence significantly the steady state of the model - basically they move the steady state quite a lot (my model is log-linearized, so all variables should be zero at steady-state, however under optimal parameters many of them are far from zero…).
I could suppose that it is because osr computes numerically local optimum and not a global one? So what can I do to return the model to a realistic steady-state under optimal parameter values?
Thanks a lot in advance!!