IRF: damped oscillations
Posted:
Wed May 20, 2015 7:18 amby Mark57
Hi,
I am working on a fairly complex DSGE model. Its impulse responses to shocks have a shape of damped oscillations. Is it a problem?
Thanks!
mark
Re: IRF: damped oscillations
Posted:
Sat May 23, 2015 1:07 pmby jpfeifer
Unless you have a really good explanation for why you should have oscillations, it simply suggests that you most probably still have a mistake in your model that gives rise to a complex eigenvalue. Most often, it is a timing mistake.
Re: IRF: damped oscillations
Posted:
Mon May 25, 2015 5:40 amby Mark57
Thanks! I will definitely check the model's equations again.
jpfeifer wrote:Unless you have a really good explanation for why you should have oscillations, it simply suggests that you most probably still have a mistake in your model that gives rise to a complex eigenvalue. Most often, it is a timing mistake.