Dear Mr. Pfeifer

I am estimating a modified version of Smets and Wouters (2003) and seem to be experiencing some issues with the Bayesian impulse responses. First of all the higher posterior density interval seems weird from my perspective as they appear to be crossing the mean impulse response in for example the case of the r-variable(not sure about if this is actually the case). Secondly, the shaded areas seem to be cut off as soon as another line is intersecting said area (see attached .png, e.g. variables Y, C, I). I assume this is not supposed to happen based on previous examples, e.g. your introduction to Dynare graphs.

I was just wondering if you (or anyone else for that matter) have any idea what could be causing this. Based on the convergence diagnostics and the prior/posterior plots I seem to be having convergence issues due to a misspecified model, however, I don’t see how this would cause the shaded areas to look they way they are in this example.

I also get the warning below, although HPD intervals seem to be computed anyways. This message does not go away even after drastically increasing the number of draws/reducing drop rate.

```
Log data density is 396.790985.
posterior_moments: There are not enough draws computes to compute HPD Intervals. Skipping their computation.
posterior_moments: There are not enough draws computes to compute deciles. Skipping their computation.
```

I currently run the following estimation command:

```
estimation(datafile=data, lik_init=2, mh_nblocks=6, mh_jscale=0.5, mode_compute=6, mh_replic=60000, mh_drop=0.5, plot_priors=0,
bayesian_irf, irf=20,moments_varendo, conditional_variance_decomposition=[1 2 4 8 12 16 20]) Y C W L R K I PIE r;
```

and I don’t seem to be getting any historical variance decomposition either, not sure why this is the case.

Any help or input would be appreciated. Let me know if you want to have a look at the script file

Regards,

modin

edit: pic didn’t get uploaded at first, attached new pdf.

untitled.pdf (14.4 KB)