Thanks a lot for the reply.

Just want to double check with you, that the simulation data of the model is the separate different firstperiod irf of iid shocks combined together.
If this is the case, I am just curious, why compare the detrended empirical data with the irf of the first period, why not the first 5 or 10, or the second. Is there any autocorrelation considered in the simulation data from model. May I know if there is any theory backing this simulation or comparison.

I have some problem using fsolve in the steady_state_model block.
I read this in the dynare manual:
It says I can assign several variables at the same time, but I am not sure how to write it, have problem doing this.
My code is the following:
steady_state_model;
…
[Qh,Nc] = ss2var(alfa,delttass,Ass,rss,gss,hb,deltah,ksi,epsilonass,Qh0,Nc0);
…
end;
ss2var is the steady state calculation function as the following:
function XX_ss=ss2var(alfa,delttass,Ass,rss,gss,hb,deltah,ksi,epsilonass,Qh0, Nc0)
options=optimset(‘Display’,‘Final’,‘TolX’,1e10,‘TolFun’,1e10);
[XX_ss,fval,exitf] = fsolve(@(XX)f_qhncsp(XX,alfa,delttass,Ass,rss,gss,hb,deltah,ksi,epsilonass),[Qh0 Nc0]);
f_qhncsp will return the value of Qh and Nc as:
function diff=f_qhncsp(XX,alfa,delttass,Ass,rss,gss,hb,deltah,ksi,epsilonass)
Qh = XX(1);
Nc = XX(2);
…
diff(1) = delttass/(1N)W/Ct;
diff(2) = QhH  gamCt/(1(1deltah)/R);
it returns:
Processing outputs …
done
Preprocessing completed.
Error using ss2var
Too many output arguments.
Error in hm72fsdraft.steadystate (line 15)
[ys_(8),ys_(13)]=ss2var(params(1),params(2),params(3),params(4),params(5),params(6),params(7),params(8),params(9),params(43),params(44));
Error in evaluate_steady_state_file (line 53)
[ys,params1,check] = h_steadystate(ys_init, exo_ss, params);
Error in evaluate_steady_state (line 254)
[ys,params,info] = evaluate_steady_state_file(ys_init,exo_ss,M, options,steadystate_check_flag);
Error in resid (line 66)
evaluate_steady_state(oo_.steady_state,M_,options_,oo_,0);
Error in hm72fsdraft.driver (line 789)
resid;
Error in dynare (line 281)
evalin(‘base’,[fname ‘.driver’]);
Thanks a lot.
hm72fsdraft.mod (8.3 KB)
ss2var.m (263 Bytes)
f_qhncsp.m (1.3 KB)