Good morning everybody,

I have a problem with my file .mod.

I had wrote a monetary union model with two open countries, with representative household, final goods producers, capital producers, financial intermediary, central bank, national government and federal authority. I have a productivity shock and my aim is to prove the efficiency of federal fiscal transfer to stabilize the economy conjoncturel. I had computed hand values of steady state and the model coherence is correct. But, an error message say that “dividion by zero”. I audited each equation one by one and neither is divided by zero.

Do you know this problem? Someone may help me to resolve this problem.

Here is my file:

modeltransfert.mod (12.7 KB)

This seems to be a bug in Dynare’s preprocessor. We will keep you posted.

This is my english file. This version is very detailed (each variable, parameter or equation are explicated so if someone may help me, it is not complicated to understand my model).

thanks so much

modeltransfert.mod (11.3 KB)

Hi,

The problem is in equation 44 (and probably 45 as well) when converting to the static model:

```
// transfer rule (part)
tauTH = ((YH-YH(-1))/YH(-1)) / (((YH-YH(-1))/YH(-1)) + ((YF-YF(-1))/YF(-1)));
tauTF = ((YF-YF(-1))/YF(-1)) / (((YF-YF(-1))/YF(-1)) + ((YH-YH(-1))/YH(-1)));
```

If you remove the lags, you have division by zero.