Consider the impulse response functions generated using the Altiga, Christiano, Eichenbaum, and Lindé (2011) DSGE model in response to a monetary shock. The endogenous variables are the output gap (ytilde_t), consumption (c_tpred), inflation (inflationq), and the interest rate (interest). Briefly discuss the results of the simulations, using macroeconomic theory.
Figure 15.10: Impulse Response Function to a Change in Money Supply 
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