Dear friends,
I am currently working on a DSGE model in Dynare and have encountered an issue that I’d like to seek your advice on. Specifically, the impulse response functions (IRFs) of a volatility shock in my model exhibit significant oscillations. The responses of key variables such as output (Y), consumption (C), and investment (I) fluctuate strongly and repeatedly cross the zero line, which seems unexpected and potentially problematic for my analysis.How can I get a smooth impulse response?
Any help is very much appreciated.