Hi All,

I’m trying to estimate Dornbusch’s model and I get the following error:

ERROR: model2.mod: line 51, col 11: syntax error, unexpected ‘(’, expecting COMMA

Error using dynare (line 174)

DYNARE: preprocessing failed

May I please ask for some advice on how to **solve** this. As per the highlighted error, I should include a “,” after the command “estimation” which does not make sense. Please find below the code. Thank you very much in advance for your help!

Also, could anyone help me on how to **forecast** with this code. I mean, the last observation of the monthly fx rate is as of April 2014 and I would like to run the model in order to get May 14, June 14, etc. Is this possible? Thanks!!!

Felipe

var epsilon p s m_d y_d y t_bill;

varexo t_bill_star p_star m epsilon_bar y_bar g;

parameters delta, eta, psi, phi;

delta=0.5;

eta=1;

psi=0.5;

phi=0.5;

model;

t_bill = t_bill_star + s(+1) - s;

m_d = p(-1) + phi*y - eta*t_bill;

epsilon = s + p_star - p;

y_d = y_bar + delta*(s + p_star - p(-1) - epsilon_bar) + g;

p - p(-1) = psi*(y_d - y_bar) + s(+1) - s;

y_d = y;

m_d = m;

end;

varobs s;

initval;

epsilon_bar = 1;

epsilon = 1;

y_bar = 1;

p_star = 1;

p = 1;

t_bill_star = 0.5;

t_bill = 0.5;

m = 1;

m_d = 1;

g = 0;

end;

shocks;

var m;

periods 1:8;

values 1.1;

end;

steady;

check;

estimated_params;

delta, beta_pdf, 0.35, 0.02;

eta, beta_pdf, 0.99, 0.002;

psi, beta_pdf, 0.25, 0.05;

phi, beta_pdf, 0.30, 0.04;

estimation(datafile=fxchile,nobs=364,loglinear,mh_replic=2000,mode_compute=4,mh_nblocks=2,mh_drop=0.45,mh_jscale=0.65,diffuse filter);