I am trying to replicate Agénor (2014): “Optimal Fiscal Management of Commodity Price Shocks”. I’ve replicated the same properties of the model as in the paper, but the resulting IRFs are different (see IRFs.pdf). for example, the consumption response to the oil price shock is in the form of a hump, which does not occur in my model. Also, when analyzing sensitivity, as in Agénor (2014), impulse responses do not change whatever the parameter value has changed. I attached the relevant files.
- Is the difference caused by a model error or in steady state calculation? I think the reason is a mistake in calculating the steady state. Is it calculation method correct?
- Does error in calculate the steady state result in model insensitivity to any changes in the value of a particular parameters?
Please, could you take a look at the relevant files and help me. And if someone has the original code of the model, please can you send it to me.
Any help would be much appreciated.
Thanks in advance.