I am using Dynare to estimate an economic model with fiscal policy. I followed chapter 5 in Dynare User guide but my model is more complicated with two kinds of households, which consumptions and labors are defined as Co, No, and Cr, Nr. And there are government spending shock and tax shock. But now I meet this problem as follow:
Log data density [Laplace approximation] is -25689.067911.
??? Error using ==> chol
Matrix must be positive definite.
Error in ==> metropolis_hastings_initialization at 52
d = chol(vv);
Error in ==> random_walk_metropolis_hastings at 58
ix2, ilogpo2, ModelName, MhDirectoryName, fblck, fline, npar, nblck, nruns,
NewFile, MAX_nruns, d ] = …
Error in ==> dynare_estimation_1 at 871
Error in ==> dynare_estimation at 62
Error in ==> example5 at 159
Error in ==> dynare at 120
I am a beginner of Dynare and I don’t know how to solve this problem. I have to hand out my thesis next week. I really need your help and I appreciate your help!
Thank you very much!
data3.m (2.78 KB)
example5.mod (1.07 KB)