Hi

I am new to DSGE model using dynare. There seems to be problem when estimating model using the option of "mode_check."

Following results are present in the window which seems to be a steady state problem.

First, what does the following error sign exactly mean? and is there any way to solve this problem ? (especially, with respect to the steady state)

Secondly, With this case, then do I have to give up final results, that is, parameter value of the posterior (if not “mode_check” in the estimation, mean parameter value is relatively plausible and satisfactory)

Finally, I am not exactly aware what is “smoothing variable” and why it is necessary. I couldn’t find it anywhere in the material including dynare manual and user guide.

Any help would be a good to me.

=============================================================================================================================================================================

Improvement on iteration 106 = 0.000000000

improvement < crit termination

Objective function at mode: -4995.940011

MODE CHECK

Fval obtained by the minimization routine: -4995.940011

STEADY: The Jacobian contains Inf or NaN. The problem arises from:

STEADY: Derivative of Equation 43 with respect to Variable data_CC (initial value of data_CC: 0.149266)

STEADY: Derivative of Equation 43 with respect to Variable data_IH (initial value of data_IH: 0.0393589)

STEADY: Derivative of Equation 43 with respect to Variable data_IK (initial value of data_IK: 0.347662)

STEADY: The problem most often occurs, because a variable with

STEADY: exponent smaller than 1 has been initialized to 0. Taking the derivative

STEADY: and evaluating it at the steady state then results in a division by 0.

Error using dynare_solve (line 60)

An element of the Jacobian is not finite or NaN

Error in evaluate_steady_state (line 66)

[ys,check] = dynare_solve([M.fname '*static’],…
Error in resol (line 104)
[dr.ys,M.params,info] = evaluate_steady_state(oo.steady_state,M,options,oo,0);
Error in dynare_resolve (line 69)
[dr,info,Model,DynareOptions,DynareResults] = resol(0,Model,DynareOptions,DynareResults);
Error in dsge_likelihood (line 256)
[T,R,SteadyState,info,Model,DynareOptions,DynareResults] =
dynare_resolve(Model,DynareOptions,DynareResults,‘restrict’);
Error in mode_check (line 141)
[fval, junk1, junk2, exit_flag] =
feval(fun,xx,DynareDataset,DynareOptions,Model,EstimatedParameters,BayesInfo,DynareResults);
Error in dynare_estimation_1 (line 701)
mode_check(objective_function,xparam1,hh,dataset*,options_,M_,estim_params_,bayestopt_,oo_);

Error in dynare_estimation (line 89)

dynare_estimation_1(var_list,dname);

Error in jules1 (line 1767)

dynare_estimation(var_list_);

Error in dynare (line 180)

evalin(‘base’,fname) ;