Hi Michel and people checking out the forum,

I am working with an extended version of Smets and Wouters (2007).

What I want to get is the impulse response of consumption to a government spending shock, *when the nominal interest rate is at zero for the first 10 periods*.

To do this, I created a deterministic exogenous variable “indicator” which is going to multiply my monetary policy equation, and I set this variable to 0 for the first 10 periods, and then back to its initial steady state value of 1:

```
var indicator;
periods 0:10;
values 0;
```

However, when I simulate the economy using simul_stoch, the interest rate does not get set to zero for the first 10 periods, for some reason. The simulated model just gives me a zero interest rate for the first period, but it does not seem to obey the above constraint I set on “indicator”.

I tired using the forecast function, but the results are worse. I get graphs which show no movement at all in the endogenous variables. I don’t really know what is going on with that.

I would be very thankful for your help, or if anybody else in the forum can jump in to clarify my doubts.

Thanks a lot!