# RBC news shock puzzles
**URL:** https://forum.dynare.org/t/rbc-news-shock-puzzles/13105
**Category:** Stochastic simulations
**Created:** [17 January 2019 08:59 UTC](https://forum.dynare.org/t/rbc-news-shock-puzzles/13105 "2019-01-17T08:59:20Z")
**Posts on this page:** 2
**Page:** 1
### Author:  [@jiang](https://forum.dynare.org/u/jiang)
#### Post date: [17 January 2019 08:59 UTC](https://forum.dynare.org/t/rbc-news-shock-puzzles/13105/1 "2019-01-17T08:59:20Z")
Dear dynare team, I read example about RBC news shock. Now I have some problems:
1. Here you list two TFP shocks, i.e., eps\_z\_news and eps\_z\_surprise. And I think the shock eps\_z\_news would anticipate by agents (such as households) when it happened, but the shock eps\_z\_surprise cannot anticipate by agents when it happened. Is right?
2. In the model block, you entered the eps\_z\_news(-8), what means? Could you give me more details about this ?
3. Why you set two shocks, as you said ‘having two exactly offsetting shocks from continuous distributions to keep the exogenous variable constant is a 0 probability event for the agents of the mode’. I cannot understand very well about this, is there any more introduction?’
4. Finally, I want to know if I only set shock eps\_z\_news, is OK? And at steady state, we use the simult\_ to simulate the process after given shock, this doing means the shock can anticipate by agents, what is different from the stoch\_simul ?
Please give me some help, thanks a lot.
My best,
ZL
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### Author:  [@jpfeifer](https://forum.dynare.org/u/jpfeifer)
#### Post date: [18 January 2019 07:46 UTC](https://forum.dynare.org/t/rbc-news-shock-puzzles/13105/2 "2019-01-18T07:46:34Z")
1. Yes, that is the idea.
2. It means that the shock `eps_news` enters the information set at time t (as all shocks do by convention), but it only affects TFP 8 periods later, i.e. 8 periods after it has become known that this shock will happen.
3. Any event from a continuous distribution has likelihood 0. It’s the density times 0. Thus, having one shock that exactly offsets the other one is extremely unlikely (loosely speaking).
4. The part with `simult_` and the pure news shock is for didactical purposes. It is along the lines of the Beaudry/Portier (2004)-paper. But nothing prevents you from having only news shocks or doing different experiments.