Hi there,

I just downloaded Dynare 4.2.0 and I am experiencing some errors with a very simple model that used to work smoothly in Dynare 4.1.3

The model is a sinmple version of Clarida, Gali, Gertler (1999) augmented with am exchange rate equation. If the exchante rate is defined as a first difference (so that it is stationary) no problem arises. But if I define the exchange rate in levels (and therefore use the unit_root_vars command) it crashes in Dynare 4.2.0 (but not in Dynare 4.1.3)

The error i get in version 4.2.0 is as follows:

Error in computing likelihood for initial parameter values

??? Error using ==> print_info at 39

Blanchard Kahn conditions are not satisfied: no stable equilibrium

Error in ==> initial_estimation_checks at 101

print_info(info, options_.noprint)

Error in ==> dynare_estimation_1 at 367

initial_estimation_checks(xparam1,gend,data,data_index,number_of_observations,no_more_missing_observations);

Error in ==> dynare_estimation at 62

dynare_estimation_1(var_list,varargin{:});

Error in ==> modelo_css at 196

dynare_estimation(var_list_);

Error in ==> dynare at 132

evalin(‘base’,fname) ;

Error in ==> dynare_run at 6

dynare modelo_css.mod

Any ideas?

Thanks in advance,

Ezequiel

modelo_css_steadystate.m (664 Bytes)

modelo_css.mod (2.87 KB)

datamacro.xls (26 KB)