Different steady states

[dajeluca]

Hi Junior,
I have a related question to this issue, since I also have two different steady states depending on the regimes 1 or 2.
The IRFs that rise plots by default are not expressed as percentage deviation from ss values (I guess). I was wondering if the correct thing to do is to plot the IRFs as percentage deviation from steady states in each regime. For example the IRFs in regime 1 are expressed as percentage deviation from ss in regime 1. And in regime 2 IRFs are expressed as percentage deviation from ss in regime 2.
Could you give me a feedback?
Thank you so much!

Originally posted by @dajeluca in #206

[jmaih]

Hi dajeluca, RISE does not automatically express IRFs as percentage deviations from the steady state — and in a multi-regime environment, it cannot guess *which* steady state to use. With regime switching, you generally have *two valid approaches*: 1. *Regime-specific IRFs* Here you assume the economy stays in the same regime for the entire simulation horizon. In that case, it *is* meaningful to express IRFs as deviations (or percentage deviations) from the *steady state of that specific regime*. So: - IRFs initialized in regime 1 → deviations from SS₁ - IRFs initialized in regime 2 → deviations from SS₂ 2. *Generalized IRFs (GIRFs)* These account for the possibility of switching during the simulation. The IRF is the expectation over all possible future regime paths, so there is *no single steady state* to scale the responses by. For GIRFs, the notion of “percentage deviation from steady state” is not well-defined. RISE’s default IRFs correspond to the first case unless you explicitly ask for generalized impulse responses. If your question is about interpreting or normalizing the plots, then yes — for regime-specific IRFs, the correct reference point is the steady state of *the regime in which the shock occurs*. For GIRFs, no regime-specific steady-state scaling is appropriate. J.

…

On Tue, Nov 18, 2025 at 1:04 PM dajeluca ***@***.***> wrote: *dajeluca* created an issue (jmaih/RISE_toolbox#226) <#226> Hi Junior, I have a related question to this issue, since I also have two different steady states depending on the regimes 1 or 2. The IRFs that rise plots by default are not expressed as percentage deviation from ss values (I guess). I was wondering if the correct thing to do is tho plot the IRFs as percentage deviation from steady states in each regime. For example the IRFs in regime 1 are expressed as percentage deviation from ss in regime 1. And in regime 2 IRFs are expressed as percentage deviation from ss in regime 2. Could you give me a feedback? Thank you so much! *Originally posted by @dajeluca <https://github.com/dajeluca> in #206 <#206 (comment)>* — Reply to this email directly, view it on GitHub <#226>, or unsubscribe <https://github.com/notifications/unsubscribe-auth/AATKBT5Z3KGEPSSOPXQARYL35MDNLAVCNFSM6AAAAACMOKBPSWVHI2DSMVQWIX3LMV43ASLTON2WKOZTGYZTOOBUGAZDCOI> . You are receiving this because you are subscribed to this thread.Message ID: ***@***.***>