Hello,
I have a program where it solves a stochastic model and generates IRF. In line 48 of the file "workertype_henry", I used delta^(2-1). However, when I changed the code to delta^(thetta-1) where thetta is a parameter equals to 2, I get a different IRF result (figure 1, response to eta shock) which is shown in the file "workertype_henrythetta". I've been starting at the code for more than a day but I couldn't figure out why changing from "2" to "thetta" could yield a drastic result in the IRF. Does anyone know why this could be the case? I am using Dynare 4.2.5. Thank you in advance for all your help!