Hi all,
I wonder what jumps in perfect foresight solution mean. I plot the simulated results in forms of the deviations from the initval (the initial steady state of my model). A few variables display jumps in period 2 specifically.
Looking forward to hear from you.
I am not sure what you mean. Many economic variables are forward-looking “jump variables” that will immediately react to any information about shocks.
I have the same problem, I know there can be some jumps but they are very severe and almost completely converged back at the following period, so very similar to what siri said. Did you find a solution? I really appreciate any help!
Without context it is impossible to tell. Does it also happen without shocks?
I have the same issue. And yes, at least in my case, it also happens without shocks and I am unable to explain why