Shock interpretation for tax multiplier


I’m new to DSGE models and to Dynare and I’m trying to understand how to interprete the impulse-response graphs for a particular shock.

The authors set a shock to labor tax in the following line:

var e_l;
stderr 1;

I am interested in getting an impact tax multiplier (Delta Y / Delta Tax), when looking at the graphs. I see that Tax has dropped down until -40 and Output has increased by 0.08. My problem is that I don’t know the units of those changes. Does anyone has any idea?Thank you in advance.

Dynare code:


The paper log-linearizes everything, so the IRFs are in percentage deviations from steady state. A 40% drop in taxes (not percentage points) causes an 8% increase in output. Given TAXss = 0.34;, this is a 14 percentage point drop in taxes.

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Thank you so much Professor!