Dynare_estimation_init:: The steady state at the initial parameters cannot be computed. Error using print_info The steady state has NaNs or Inf BUT model_diagnostics is ok

Steady state
1

Hi Prof. Pfeifer, i’m running a dsge-var(1) model, but 'm getting the following error:

dynare_estimation_init:: The steady state at the initial parameters cannot be computed.
Error using print_info
The steady state has NaNs or Inf

I checked the diagnostics and residuals and the results look ok, but when I apply the estimation command as you cans see in the file appended, the error happens. I did a review of the steady state equations but i didn’t see any error however appreciate any suggest to fix that problem. Thanks a lot!

The code was run on dynare 5.4 and 6.2, but the problem persist. I append the files

DATABf2.xlsx (36.9 KB)
model1.mod (15.9 KB)

2
  1. Do not use initval for estimation as it will fail for parameter values other than the starting ones.
  2. Make sure the prior space is restricted to sensible regions. You use
   eta,1.0,,,inv_gamma_pdf,1.0,0.25;

which means eta has a prior mean of 1. But having 1 is not allowed because it results in a division of 0 later on, causing the error message.

3

Thanks Prof. Pfeiffer, it’s working now. I hadn’t seen the impact of this value on eta parameter.