Hello,

I am trying to estimate a parameter with GMM after solving the model with an optimal commitment policy. I get this error message.

“method_of_moments: The steady state at the initial parameters cannot be computed.”

I am not sure what I am doing incorrectly. I don’t get any error messages when I solve for the optimal commitment policy and only get this error message when I estimate the model. Could you help me figure this out? Does it have something to do with having to change the steady state values as the value of the parameter that I am trying to estimate changes? If so, how should I go about fixing this?

Thank you.

The files that I am using are attached below.

data.xls (25.5 KB)

full_com_mp.mod (2.9 KB)

setup.m (2.4 KB)

steadystate.m (1.8 KB)