Suppose I have a New Keynesian model in which the underlying shocks are TFP shocks.
Suppose I want to see the effect of “shock to labor supply” on GDP. Now, the shock is in quotation marks because the true underlying shocks are only to TFP, it’s just I really want to graphically see through IRF, how decrease in labor affects GDP.
Can I add in dynare mod file, a phantom shock to the labour definition? The phantom shock is uncorrelated with true shocks to TFP.
Thus I can use IRF of the phantom shock to obtain the graphical IRF result I desire, which is, how decrease in labor affects GDP