Hi everyone, hi Professor @jpfeifer.

my model runs but gives a wrong IRF: with a positive monetary shock, it increases production but reduces the energy (m) which is a productive factor. I assumed the steady state values. Is this the mistake? if yes, how can I determine the correct steady state values?

I thank anyone who can help me.

nek1.mod (1.9 KB)

What about the suggestion in

as suggested, I have verified that with very little energy the model replicates the same results as the theory, so the problem concerns the inclusion in the model of the energy sector. Does this mean that I have wrongly linearized the energy equations? Or can it also be due to the steady state values â€‹â€‹that I have attributed? Thanks so much.

That is hard to tell. It could be a wrong parameterization or wrong linearization. As I suggested before, you should try to understand economically what happens if you increase the share of energy. There may be something in the economics explaining the results.

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I think that equations 10 and 12 are redundant, is that so?