Bayesian Estimation \

There is a lot awry.

  1. 32 observations is not sufficient. [Update: see the clarification here [url]http://www.dynare.org/phpBB3/viewtopic.php?f=1&t=4723&start=0]
  2. Hp filtering removes the mean, but your observable variable is not mean 0
  3. Your model and your data are/were not in logs. Thus, they are not percentages but levels. This means that the scaling matters.
  4. Two-sided HP-filtering is non-causal and strongly discouraged for Bayesian estimation

Points two and three essentially mean that you need a correctly specified observation equation.