Good morning . I use the model of Gali and Monacelli (2005) but with some modifications . I have obtain this message
ERROR: There are 42 equations but 37 endogenous variables!
??? Error using ==> dynare at 114
DYNARE: preprocessing failed
My question is :In some modefile I see that the number of endogenous variables can be inferior to the number of equation.
*I don’t have 42 equations but 21 equations and not 37 endogenous variables but insteas 15… what is my fault.Please answer me.Thank you NK_GM052.mod (9.79 KB)
Having fewer equations than variables is only possible if you do optimal policy computations. This is not the case in your current setup. The reason that you are shown more equations than are entered is due to Dynare creating auxiliary equations for lags/leads larger than 1.
In your model the problem derives from the interest equation from the model database. The variable interest does not appear anywhere else. It seems like this equation is redundant. Check with the original paper how the model is closed.