Why do the uncertainy shock have different results when I add more first-moment shocks

Stochastic simulations
1

@jpfeifer
Why do the uncertainy shock have different results when I add more first-moment shocks.

model_xpy.mod (7.8 KB)
model_x_steadystate.m (3.6 KB)

2

Because additional level shocks move the stochastic steady state and therefore the point in the state space where you compute the IRFs.

3

I appreciate your reply. However, if that’s the situation, when I aim to comprehend the influence of uncertainty shocks on the macroeconomy, how many first-order moment shocks should I incorporate?

4

There is no general answer. Your economy should reflect the statistical properties of the economy, whatever that means. Different researchers may have different ideas/priors.

5

Thank you , I’ve got your mean.