Positive responses to uncertainty shocks

Dear friends,

I’ve encountered a simple problem in a model that uncertainty shock has positive effects on macro variables in the short run(when I set “replic = 5000”).
Does it certainly happen in a model without price stickiness or wage rigidity?
Thanks a lot!

In the long-run, GIRFs should show a zero effect of uncertainty shocks. In the short-run, you should see expansionary effects of uncertainty if you have flexible labor supply and no nominal rigidities.

Hi, professor, deeply thanks for your help!
Sorry, I made a mistake last thread. Right, I found the same results as literature without nominal rigidity using Basu’s files about irfs. But whether there exits a phenomenon that output decreases while consumption increasing at the same time under the effects of uncertainty? May be that is unreasonable.

You may get something like this with very high investment adjustment costs as those are going to prevent precautionary savings.

Yes, I think you are right! Thanks for your help!!