Hello,

Being new to Dynare, I do not know to diagnose and resolve a problem I am have with

an infinite element was encountered error.

I have looked at similar postings, but they were not helpful to me.

If someone could be so kind to point out my error and how to fix it in my mod file I would greatly appreciate it.

Thank you in advance.

Regards,

Richard

## The error I am getting:

An infinite element was encountered when trying to solve equation(s) 13

with respect to the variable(s): a.

The values of the endogenous variables when the problem was encountered were:

pi 0

y_gap 0

y_nat 0

y 0

r_nat 0

i_nom 0

n 0

x 0

w 0

mc 0

p 0

nu 0

a 0

d 1

Mod6.mod (5.23 KB)

Your model setup is inconsistent. Everything is already linearized. From

```
d = rho_d * d(-1) + eps_ds; // commodity pricing model shock
```

follows that d=0 in steady state.

But in other equations you use log(d). Is suppose you actually mean just d there. The log(0) explains the problem.

Hello,

I did change the code from log(d) to d before posting the code, and it still had the same problem.

Regards,

Richard

Hello,

Re-ran the code with the modification of changing : log(d) -> d again, and I get the following error

I have attached to modified code.

Regards,

Richard

An infinite element was encountered when trying to solve equation(s) 5

with respect to the variable(s): y.

The values of the endogenous variables when the problem was encountered were:

pi 0

y_gap 0

y_nat 0

y 0

r_nat 0

i_nom 0

n 0

x 0

w 0

mc 0

p 0

nu 0

a 0

d 0

Error using lnsrch1 (line 71)

Some element of Newton direction isnâ€™t finite. Jacobian maybe singular or there is a problem with initial values

Mod6_1.mod (5.2 KB)

`looks wrong. If y_nat is in deviation from steady state, why is there a positive constant v_y in the equation?`

looks wrong. If y_nat is in deviation from steady state, why is there a positive constant v_y in the equation?

Thank you Johannes, your insight solved my problem.

Regards,

Richard