# Production negatively react to technology shock **URL:** \ **Category:** General DSGE Modeling\ **Created:** [29 August 2022 03:10 UTC](https://forum.dynare.org/t/production-negatively-react-to-technology-shock/20981 "2022-08-29T03:10:45Z")\ **Posts on this page:** 6\ **Page:** 1
**Author:** ![yzwang](https://forum.dynare.org/letter_avatar_proxy/v4/letter/y/c0e974/32.png) [@yzwang](https://forum.dynare.org/u/yzwang)\ **Post date:** [29 August 2022 03:10 UTC](https://forum.dynare.org/t/production-negatively-react-to-technology-shock/20981/1 "2022-08-29T03:10:45Z")
Hi, everyone. I am a novice to DSGE. I am trying to build an open-economic NK model with bank. But I got weird results as the production (Y) always negatively react to positive technology shock (va). I tried to tune the parameters many times, but somehow I can’t get a regular pattern of IRF. ![截屏2022-08-29 10.57.02](https://forum.dynare.org/uploads/default/original/2X/f/f8facf8bc432461317339bff5bfeaa795fc34171.png) So as in my knowledge, I believe normally Y and technology A should move in the same direction, which is not the case here. I am quite confused and don’t know what went wrong in my model. Can someone help me out? Thank you! ---
**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Post date:** [29 August 2022 11:14 UTC](https://forum.dynare.org/t/production-negatively-react-to-technology-shock/20981/2 "2022-08-29T11:14:16Z")
I am getting a Blanchard-Kahn error with your file. ---
**Author:** ![yzwang](https://forum.dynare.org/letter_avatar_proxy/v4/letter/y/c0e974/32.png) [@yzwang](https://forum.dynare.org/u/yzwang)\ **Post date:** [29 August 2022 13:21 UTC](https://forum.dynare.org/t/production-negatively-react-to-technology-shock/20981/3 "2022-08-29T13:21:56Z")
Sorry prof. I uploaded the wrong file for computing the steady state. I replaced it with the right one. Could you please help me have a look. Many thanks! [NG4.mod](https://forum.dynare.org/uploads/short-url/95NSP7mGTD49oPIA6xDKSt53mTB.mod) (2.9 KB) [ss2.m](https://forum.dynare.org/uploads/short-url/1685ZbfGrODNgHLK3T0vcQfyc8K.m) (1.3 KB) ---
**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Post date:** [30 August 2022 08:00 UTC](https://forum.dynare.org/t/production-negatively-react-to-technology-shock/20981/4 "2022-08-30T08:00:51Z")
You should try to shut of features of the model to see where this comes from. For example, you have a complicated Taylor rule and capital adjustment costs that can be simplified. ---
**Author:** ![yzwang](https://forum.dynare.org/letter_avatar_proxy/v4/letter/y/c0e974/32.png) [@yzwang](https://forum.dynare.org/u/yzwang)\ **Post date:** [2 September 2022 13:45 UTC](https://forum.dynare.org/t/production-negatively-react-to-technology-shock/20981/5 "2022-09-02T13:45:38Z")
Thank you Professor, your advice helps a lot! So I slightly simplified the model and tuned the parameters and I got some weird oscillating IRF pattern like this. ![截屏2022-09-02 21.14.24](https://forum.dynare.org/uploads/default/original/2X/e/ed1674b09504908868c2657fb6d133151a86e5a0.png) I was wondering if these IRFs make sense? If it’s wrong, is it because that the some eigenvalues are too close to 1? I have also write an RBC model with bank and the results just seem very “stylized”, so I was wondering maybe it has something to do with the way that I introduce price stickness to the model? Also, I spent a lot of time tuning the parameters and I found that the model is very delicate. The BK condition are not satisfied even when I just make a tiny change of some parameter. I am not sure is that normal for a DSGE model? Thanks! [openGK.mod](https://forum.dynare.org/uploads/short-url/6klFbkUXQeg2rlRybmkcFFOOZ0Z.mod) (2.5 KB) [ss.m](https://forum.dynare.org/uploads/short-url/2mvMLzkWvtZvkVKNB0FDlQGAo1q.m) (1.4 KB) ---
**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Post date:** [2 September 2022 19:22 UTC](https://forum.dynare.org/t/production-negatively-react-to-technology-shock/20981/6 "2022-09-02T19:22:21Z")
The post at > [@Oscilating or alternating IRFs](https://forum.dynare.org/t/oscilating-or-alternating-irfs/3620/3): > > It means that there is a complex eigenvalue leading to oscillations. Usually, when people have this problem in the forum, it comes from them ignoring the Dynare timing convention and then torturing the timing until the BK conditions are satisfied. When doing so, the correct economic timing is ignored and oscillating IRFs result. comes to mind.