Transition path shake

Perfect foresight simulations
1

I want to solve transition path from initial steady state to another, which is a result of a deterministic parameter change. Should I use “perfect foresight solver” to implement so a transition?

However, when I doing so in Dynare, the transition path shakes a lot around initial steady state, up and down for a few periods. I think it should be a smooth transition path. What is the typical reasons for that? Maybe my model’s timing is wrong?

2
  1. Yes, such a transition is usually done using the perfect foresight solver.
  2. A wiggly transition path is often indeed caused by timing problem. But without the files it is hard to tell.