# Error using ==\> dynare **URL:** \ **Category:** Dynare help (legacy posts)\ **Created:** [30 August 2010 10:23 UTC](https://forum.dynare.org/t/error-using-dynare/1630 "2010-08-30T10:23:49Z")\ **Posts on this page:** 3\ **Page:** 1
**Author:** ![zubin](https://forum.dynare.org/letter_avatar_proxy/v4/letter/z/2acd7d/32.png) [@zubin](https://forum.dynare.org/u/zubin)\ **Post date:** [30 August 2010 10:23 UTC](https://forum.dynare.org/t/error-using-dynare/1630/1 "2010-08-30T10:23:49Z")
Hi: Recently I am working on a two-country open economy model, combining BGG(1999) and Obstfeld & Rogoff(1995). I assume the home country’s currency is pegged to the foreign country’s, and in each period, a fixed portion of foreign net worth enters home country as FDI, but the short-term foreign debt, as well as other forms short-term capital flows are forbidden in the home country. Therefore, since home country’s currency is pegged, it has to use money base to balance its current account and FDI account to stabilize the exchange rate. As a beginner of Dynare, I found that the following problems keeps showing in my Matlab after I fed Dynare the parameter value and F.O.Cs of the model. I hope someone will help debug my Dynare programme here(when I write this programme I refer to the BGG programme a lot, see atachment). My model’s F.O.Cs are also presented in the attachment.Thanks ! My programme starts: // Bin Zhu // Aug 10 // intial: rU is rU(-1);kU is kU(-1) // BGG and FDI open economy model, code for Dynare // assume flexible price // variablenamef is the foreign counterpart var y\_w , e, rs, t\_U; // involve both countries;tU is trade balance of home country; rs is foreign reserve of home country; y\_w is world output var cU , i , mo, k , q ,y, yh, x, ph, h , p, pi , r , n , ce , rk , efp , aU, gU, m; // for home country; mo is monitoring cost var cfU , i\_f , mof, kf , qf , yf, yhf, xf, phf, hf , pf, pif , rf , nf , cef , rkf , efpf , af, gf, mf; // for foreign country varexo e\_gU, e\_aU, ksi, e\_gf, e\_af, ksif; parameters epsl,TB\_F,FDI\_F,v,mkup,E,Rg; parameters CY\_w,CeY\_w,IY\_w,GY\_w,MoY\_w,kn,yn,Rk,beta,eta,ita,zeta,alphaK,delta,phi,omega,gamma,psiz,GDP\_TB,nomC\_TB,nomI\_TB,nomG\_TB,nomCe\_TB,nomMo\_TB; // for home country parameters CY\_wf,CeY\_wf,IY\_wf,GY\_wf,MoY\_wf,knf,ynf,Rkf,betaf,etaf,itaf,zetaf,alphaKf,deltaf,phif,omegaf,vf,gammaf,psizf; // for foreign country epsl = 0.957593537 ; //degree of substitution, the more the larger TB\_F = 0.78 ; // ratio of trade balance trend and foreign reserve trend for home country FDI\_F = 0.22 ; // ratio of net FDI trend and foreign reserve trend mkup = 1.1 ; //%X: steady state value v = 0.2;//proportion of FDI E = 1;//steady state value of exchange rate Rg = 0.03;//nominal net interest rate of foreign government bond CY\_w = 0.1 ; CY\_wf = 0.2;// nC/Y\_w: long-term trend of national consumption share of world demand CeY\_w = 0.005 ; CeY\_wf = 0.005 ;// nCe/Y\_w IY\_w = 0.184229809 ; IY\_wf = 0.184229809;// nI/Y\_w GY\_w = 0.2 ; GY\_wf = 0.1;// nG/Y\_w MoY\_w = 0.015 ; MoY\_wf = 0.015;// nMo/Y\_w kn = 1.081759973 ; knf = 2.081759973;//K/N: economic-wide leverage rate yn = 0.3 ; ynf = 0.282494996 ;//%Y/N: ratio of output and net worth Rk = 2.018177298 ; Rkf = 1.018177298 ;//expected gross return of one unit physical capital beta = 0.99 ; betaf = 0.99;//calibrated by risk-free interest rate eta = 2.89 ; etaf = 3;//steady state value of the ratio of leisure hours over working hours ita = 0.052092347 ; itaf = 0.052092347;//coefficient in loan demand equation zeta = 0.9576 ; zetaf = 0.9576; //coefficient in capital demand equation alphaK = 0.4 ; alphaKf = 0.35;//capital share in wholesale goods production delta = 0.03 ; deltaf = 0.025 ;//capital depreciation rate phi = 0.25 ; phif = 0.25;//coefficient in investment demand equation omega = 0.97; omegaf = 0.984615;//ordinary worker’s labor share in entire labor input gamma = 0.9728 ; gammaf = 0.9728;//survival rate of entrepreneurs psiz = 0.996; psizf = 0.996;//autoregressive coefficien of technology shock GDP\_TB = 12; // nominal GDP over nominal trade balance for home country nomC\_TB = 4.48; nomI\_TB = 5.97; nomG\_TB = 1.634; nomCe\_TB = 1; nomMo\_TB = 1.05; R = 1/beta ; Rf = 1/betaf; model; mo = rk + q(-1) + k; //definition of mo mof = rkf + qf(-1) + kf; //definition of mof y\_w = (CY\_w_cU + CY\_wf_cfU) + (IY\_w_i + IY\_wf_i\_f) + (GY\_w_gU + GY\_wf_gf) + (CeY\_w_ce + CeY\_wf_cef) + (MoY\_w_mo + MoY\_wf_mof); //aggregate demand cU = -r + cU(+1); [//4.15](https://4.15) Euler equation cfU = -rf + cfU(+1); [//4.15](https://4.15)\* ce = n; [//4.16](https://4.16) entrepreneurs’ demand cef = nf; [//4.16](https://4.16)\* m - p = -cU - beta/(1-beta)_r(+1) + beta/(1-beta)pi(+1); //money demand mf - pf = -cfU - betaf/(1-betaf)rf(+1) + betaf/(1-betaf)pif(+1); //money demand pi = p - p(-1); //definition of inflation pif = pf - pf(-1); efp = rk(+1) - r; //definition of premium efpf = rkf(+1) - rf; //definition of premium rk(+1) - r = -ita(n-q-k); [//4.17](https://4.17) loan demand rkf(+1) - rf = -itaf(nf-qf-kf); [//4.17](https://4.17)_ rk = (1-zeta)_(y-k(-1)-x) + zeta_q - q(-1); [//4.18](https://4.18) capital demand rkf = (1-zetaf)_(yf-kf(-1)-xf) + zetaf_qf - qf(-1); [//4.18](https://4.18)\* q = phi\*(i-k(-1)); [//4.19](https://4.19) investment demand qf = phif\*(i\_f-kf(-1)); [//4.19](https://4.19)\* y = aU + alphaK_k(-1)+(1-alphaK)omegah; [//4.20](https://4.20) wholesale goods supply yf = af + alphaKf_kf(-1)+(1-alphaKf)_omegaf_hf; [//4.20](https://4.20)\* yh = -epsl\*(ph - p) + y\_w; //diversified product supply yhf = -epsl\*(phf - pf) + y\_w; // yh = y; yhf = yf; y - h - x - cU = eta^(-1)_h; [//4.21](https://4.21) labor market equilibrium yf - hf - xf - cfU = etaf^(-1)hf; [//4.21](https://4.21) p = n_ph + (1-n)_(e + phf) ;//price evolution pf = n_(ph-e) + (1-n)_phf ; ph = p - x ;//optimal price setting phf = ph - xf ; m - m(-1) = e + (rs - rs(-1)) + ksi; // money supply mf - mf(-1) = ksif; e = 0; // fixed exchange rate regime k = delta_i + (1-delta)_k(-1); [//4.23](https://4.23) capital formation kf = deltaf_i\_f + (1-deltaf)_kf(-1); [//4.23](https://4.23)_ n = gamma/beta_n(-1) + ((gamma/beta)-((gamma_kn)/beta))_r + ((gamma_kn)/beta+((gamma_kn)_(Rk-(1/beta))))_rk +((gamma_kn)_(Rk-(1/beta)))q(-1) + ((gammakn)_(Rk-(1/beta)))_k + ((1-alphaK)_(1-omega)_yn/mkup)_(y-x) + v_E_nf; [//4.24](https://4.24) net worth evolution nf = (1-v)_gammaf/betaf_nf(-1) + ((1-v)_(gammaf/betaf)-((gammaf_knf)/betaf))_rf + ((gammaf_knf)/betaf+((gammaf_knf)_(Rkf-(1/betaf))))_rkf +((gammaf_knf)_(Rkf-(1/betaf)))qf(-1) + ((gammafknf)_(Rkf-(1/betaf)))_kf + ((1-alphaKf)_(1-omegaf)_ynf/mkup)_(yf-xf); [//4.24](https://4.24) rs = (1+Rg)_rs(-1) + TB\_F_t\_U + FDI\_F\*(nf + pf + e) // foreign reserve t\_U = GDP\_TB\*(epsl_p + y\_w + (1-epsl)ph) - nomC\_TB(p+cU) - nomI\_TB_(p+i) - nomG\_TB\*(p+gU) - nomCe\_TB\*(p+ce) - nomMo\_TB\*(p+mo); gU = 0.95_gU(-1) + e\_gU; //government purchase shock process, 4.26 gf = 0.95_gf(-1) + e\_gf; //government purchase shock process, 4.26\* aU = psiz_aU(-1) + e\_aU; [//4.27](https://4.27) technology shock af = psizf_af(-1) + e\_af; [//4.27](https://4.27)\* end; //initval; //end; shocks; var e\_gU; stderr 0.0155; //var e\_gU; stderr 0; var e\_aU; stderr 0.0043; //var e\_aU; stderr 0; var ksi;stderr 0.06; var e\_gf; stderr 0.0155; //var e\_gf; stderr 0; var e\_af; stderr 0.0043; //var e\_af; stderr 0; var ksif;stderr 0.06; end; steady(solve\_algo=2); check; stoch\_simul(order=1,irf=20) y cU i efp n rn pi r rk yf cfU i\_f efpf nf rnf pif rf rkf; Matlab result: Starting Dynare (version 4.1.2). Starting preprocessing of the model file … ERROR: Untitled3.mod:94.1-3: syntax error, unexpected NAME ??? Error using ==\> dynare DYNARE: preprocessing failed [FOC.pdf](https://forum.dynare.org/uploads/default/original/1X/b250c78ff8eb64448542451ba3025836167542c5.pdf) (89.1 KB) [FDI.mod](https://forum.dynare.org/uploads/default/original/1X/d8720f34d1e77054faab44dda9831f5e2f6cc744.mod) (5.81 KB) [BGG.mod](https://forum.dynare.org/uploads/default/original/1X/904de0c34009a4c19892b3d5b7dcc4f663c90dc2.mod) (2.13 KB) ---
**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Post date:** [30 August 2010 11:45 UTC](https://forum.dynare.org/t/error-using-dynare/1630/2 "2010-08-30T11:45:18Z")
There is a semicolon missing in line 93. ---
**Author:** ![zubin](https://forum.dynare.org/letter_avatar_proxy/v4/letter/z/2acd7d/32.png) [@zubin](https://forum.dynare.org/u/zubin)\ **Post date:** [30 August 2010 14:20 UTC](https://forum.dynare.org/t/error-using-dynare/1630/3 "2010-08-30T14:20:32Z")
Thanks a lot! Now my programmme can be preprocessed.