Diffrence between modes in posteriors and priors

Dynare help (legacy posts)
1

hi all
I’m estimating an open macro economy model. I’m using the posterior mode optimization routine mode_compute=6. but modes values in posteriors are very higher than modes values in priors.Does the data need to be reviewed?
Thank you very much
sara.mod (1.97 KB)

2

Given the large posterior shock variances, there is most likely something wrong with the observation equation. See Pfeifer(2013): “A Guide to Specifying Observation Equations for the Estimation of DSGE Models” on how to correctly map data and model variables.

3

Thank you very much