Conditional Forecast Paths and Controlled Exog. Variables

Dear Professors,
I am trying to produce conditional forecasts from a DSGE model with financial frictions as in Gerali et al.(2010) for Pakistan economy.
In doing so, I am setting two-period conditional forecast path for inflation while keeping interest rate shock as controlled exogenous variable.
I have a total of 12 observable variables including 3 foreign (US) variables i.e. interest rate, inflation, and output. Can I use Federal Funds Rate shock as a controlled exogenous variable for two variables i.e. US inflation, and output? Moreover, it is possible to specify conditional forecast paths of different length, for example, 8-period path for US interest rate and inflation and 2-period path for domestic inflation.

  1. You need as many controlled shocks as variables you want to control. So you cannot use the FFR to control two variables.
  2. Different lengths of forecast paths are only possible in the unstable Dynare version (4.6) See

Thanks a lot Professor!

Dear professor,

I have installed the dynare 4.6 (unstable) and tried providing paths for two endogenous variables, but it’s throwing the following error.

Warning: Matrix is singular to working precision.

In mcforecast3 (line 60)
In imcforecast (line 252)
In FPAS31_est4_forecasting.driver (line 713)
In dynare (line 300)

Could you please suggest a way out


Mohsin Waheed

We would need to see the file

Dear Professor Pfeifer,

Please find attached model and data files. This is a single sector basic version of our model with inflation indexation, habit formation, and importer Calvo, but without government

The error log is appended below

In mcforecast3 (line 60)
In imcforecast (line 252)
In Model_v2.driver (line 423)
In dynare (line 291)


Mohsin Waheedmodel_data.mat (2.7 KB)
Model_v2.mod (6.8 KB)

each time I run the following command:
conditional_forecast_paths. This message display:

Index exceeds matrix dimensions.

Error in imcforecast (line 276),:))) = [tmp(t1,:)’ ,tmp(t2,:)’ ]’;

Error in dsge_mada1 (line 632)
imcforecast(constrained_paths_, constrained_vars_, options_cond_fcst_);

Error in dynare (line 235)
evalin(‘base’,fname) ;

any help will be very helpful

Which Dynare version? Also please provide codes to replicate the issue.