Oscilating or alternating IRFs.

[GOODLUCK]

Hi everyone,

Have you ever come across such IRFs that oscilate or alternate around the steady state(zero) before finally converging? Does it mean the model is unstable or sth? I am concerned about such kind of IRFs. I don't know how to interpret it or how it comes into being . Could anyone kindly help? Many thanks in advance.

[Daniel Bendel]

This has also happened to me before. In fact it vanished because I have found a mistake in my model. Perhaps you should first check your model equations.

[jpfeifer]

It means that there is a complex eigenvalue leading to oscillations. Usually, when people have this problem in the forum, it comes from them ignoring the Dynare timing convention and then torturing the timing until the BK conditions are satiesfied. When doing so, the correct economic timing is ignored and oscillating IRFs result.

[GOODLUCK]

I've done it.Thank you all guys.