Dynare forums

Hi,

I have a problem when I do simulation by dynare. As follows:

Interest rate rule: i_t=rho+alpha*pi_t^2+v_t, where i_t is interest rate, rho is constant, pi_t is inflation, v is a monetary shock. i_t’s steady value is rho. when I do simulation, i_t equals alpha*pi_t^2+v_t, that is not rho+alpha*pi_t^2+v_t. But I want to get the irf, where i_t =rho+alpha*pi_t^2+v_t, and it converges to rho, not zero. How can I do it? Many thanks!

Kind regards,
dieme

By manually drawing the graph and adding the steady state. By default Dynare displays deviations from steady state. You can find in the manual where the IRFs and the steady state are stored.