I am having similar problem. In my case dynare is able to solve the model and generate irf, but when I am using model_diagnostics command then it is saying that:
MODEL_DIAGNOSTICS: The Jacobian of the static model contains Inf or NaN. The problem arises from: (%%%%)
MODEL_DIAGNOSTICS: The problem most often occurs, because a variable with
MODEL_DIAGNOSTICS: exponent smaller than 1 has been initialized to 0. Taking the derivative
MODEL_DIAGNOSTICS: and evaluating it at the steady state then results in a division by 0.
MODEL_DIAGNOSTICS: If you are using model-local variables (# operator), check their values as well.
I read that such problem may come due to small bug in dynare ( I am suing 4.5.7).
I am attaching the code. I am not sure if I am doing some mistake or it is due to some small bug.
I will be thankful if someone can help me in this regard.
model2.mod (9.1 KB) model2_ss.m (3.3 KB) model2_steadystate.m (308 Bytes) param.mat (2.8 KB) param2_ss.m (2.8 KB)