Hi all,

I am estimating the parameters and shocks for this model; I have checked the identification for the set of estimated parameters and they are all identified. However, when I run the estimation, it only works if I remove the priors of 3 parameters: alp, sigma_c, and s. In contrast, if I include these parameters, it would returns errors as below

Error using chol

Matrix must be positive definite.Error in posterior_sampler_initialization (line 84)

d = chol(vv);Error in posterior_sampler (line 60)

posterior_sampler_initialization(TargetFun, xparam1, vv,

mh_bounds,dataset_,dataset_info,options_,M_,estim_params_,bayestopt_,oo_);Error in dynare_estimation_1 (line 474)

posterior_sampler(objective_function,posterior_sampler_options.proposal_distribution,xparam1,posterior_sampler_options,bounds,dataset_,dataset_info,options_,M_,estim_params_,bayestopt_,oo_);Error in dynare_estimation (line 105)

dynare_estimation_1(var_list,dname);Error in paper2.driver (line 573)

oo_recursive_=dynare_estimation(var_list_);Error in dynare (line 293)

evalin(‘base’,[fname ‘.driver’]) ;

I have tried estimating them with different mode_compute (4, 5, 6, 9) and several mode_file but they do not help.

Please have a look and let me know what I should do to improve this estimation.

Thank you!

Best,

Anh Pham

paper2.mod (4.2 KB)

paper2_mode.mat (778 Bytes)

paper2_steadystate.m (2.0 KB)

uk_data.mat (2.9 KB)

paper2_mh_mode.mat (984 Bytes)