Dynare forums

Hello all. I am new to Dynare. Please forgive me if my questions are caused by inadequate understanding in fundamental knowledge, or they have been answered previously.

I try to generate the IRFs in an exogenous tax policy case with heterogeneous agents. Attached are my model and mod. document. My current issues are (1) for the capital income tax shock, it generates 9 graphs without the one for labor. (2) for the labor income tax shock, it generate only 3 graphs (consumption for workers, government spending and labor income tax). How can I get the missing ones? I am afraid that there are some errors in the equations or my misunderstandings in the shock transmission, which might be the reason of the abnormal results... I was wondering if someone could give me some help. Thank you so much for your time.

When you look at the policy functions being displayed, you can see that labor is constant. You need to find out the economic intuition behind this. It looks like this is a model feature.

jpfeifer wrote:When you look at the policy functions being displayed, you can see that labor is constant. You need to find out the economic intuition behind this. It looks like this is a model feature.

I get it. Thank you, jpfeifer. I sincerely appreciated it.