Hello Dynare comminity,
I have a TANK-DSGE model with Ricardian households and hand-to-mouth households, used to simulate shocks under different fiscal rules.
The model has been log-linearized. When parameters are set at the prior values for Bayesian estimation, policy simulations (stoch_simul) run normally, with both steady-state values and residuals equal to zero.
The command model_diagnostics indicates collinearity for variable “p” in equations 1–25, but this does not seem to have any noticeable effect since the model can be solved correctly.
However, the model consistently throws an error during Bayesian estimation:
ESTIMATION_CHECKS: There was an error in computing the likelihood for initial parameter values.
ESTIMATION_CHECKS: If this is not a problem with the setting of options (check the error message below),
ESTIMATION_CHECKS: you should try using the calibrated version of the model as starting values. To do
ESTIMATION_CHECKS: this, add an empty estimated_params_init-block with use_calibration option immediately before the estimation
ESTIMATION_CHECKS: command (and after the estimated_params-block so that it does not get overwritten):
Error using print_info: Blanchard & Kahn conditions are not satisfied: no stable equilibrium.
I have tried estimating only one or a subset of the parameters, and also used alternative datasets, but the same error occurs.
All prior distributions are taken from the existing literature or standard values commonly used in the field.
The data have been converted to real variables, adjusted for seasonality with X-12 adjustment, and processed by log-differencing or logging and de-meaning.
I would greatly appreciate any advice from experts. Thank you all for your support and help.
It is the Chinese New Year (the Spring Festival), so I wish you all a Happy the Spring Festival!
Best wishes.
data.mat (3.6 KB)
bayes.mod (3.5 KB)