Simulating more shocks simultaneously

[divy]

Hello!

Is it possible to sum up the IRFs in response to more shocks if I am simulating more shocks occuring contemporaneously? Maybe is it possible if IRFs are computed through a first order approximation? I guess for higher order approximation is not ok.

Thank you.

Best regards,

D

[jpfeifer]

See

Two shocks simultaneously in a model

If you are working with a linearized model (order=1), the IRF to a joint shock is the sum of the individual IRFs. That way you can create any linear combination. If you want to do this more formally, you can use the simult_-function to generate any combination you like (even at higher order). See github.com/JohannesPfeifer/DSGE_mod/blob/master/RBC_news_shock_model/RBC_news_shock_model.mod for an example

[divy]

Thank you very much Johannes!!

Best,

D