Dear all,

I got some troubles using Dynare 4 by estimating the correlation between shocks. So in the “shocks” section I just assumed that the correlation coefficient between shocks is equal to 1:

shocks;

var e_a; stderr 0.5;

var e_a, e_x = 0.5*0.5;
var e_ph; stderr 0.5;
var e_ph, e_x = 0.5*0.5;

var e_t; stderr 0.5;

var e_t, e_x = 0.5

*0.5;*

var e_th; stderr 0.5;

var e_th, e_x = 0.50.5;

var e_th; stderr 0.5;

var e_th, e_x = 0.5

var e_x; stderr 0.5;

end;

In the “estimated_params” section I specified correlation coefficients to be estimated using MLE as follows:

estimated_params;

stderr e_a,0.5,;

corr e_a, e_x,0.123,-1,1;

stderr e_ph,0.5,;

corr e_ph, e_x,0.152,-1,1;

stderr e_t,0.5,;

corr e_t, e_x,-0.845,-1,1;

stderr e_th,0.5,;

corr e_th, e_x,-0.427,-1,1;

stderr e_x,0.5,;

end;

After running the .mod-file I got estimation results for standard deviation and correlation coefficients of specified shocks

AND the following error message:

??? Undefined command/function ‘Sigma_e_’.

Error in ==> set_all_parameters at 42

Sigma_e(k1,k2) = xparam1(i+offset)*sqrt(Sigma_e_(k1,k1)*Sigma_e_(k2,k2));

Error in ==> DsgeSmoother at 35

set_all_parameters(xparam1);

Error in ==> dynare_estimation at 887

[atT,innov,measurement_error,filtered_state_vector,ys,trend_coeff] = DsgeSmoother(xparam1,gend,data);

Error in ==> test12_2 at 284

dynare_estimation(var_list_);

Error in ==> dynare at 79

evalin(‘base’,fname) ;

Until now I have not found out, why this error message shows up.

I would be glad if somebody knows about this error and could explain me how to deal with that.

Thank you!