I have make some adjustments to the fs2000.mod file to include a Taylor rule and I made some adjustments to the bank’s balance sheet. The stochastic shock works just fine. But my Bayesian estimation causes dynare to crash. The error message is

[quote]The loglinearization of the model cannot be performed, because the steady state is not strictly

positive.[/quote]

Also, dynare tells me to try adding

. Would this work? Is there an example of what this means?

Please advise.

Thanks

detoutput2.mod (7.86 KB)