Thanks for your reply, sorry for getting back late.

Now I am trying to estimate a single equation from the model above but I just keep getting the below message. It seems that I am making a silly mistake

I have tried some other equations as well but the output is the same!

[code]var T;

varexo e, pstar, p, y, ystar;

parameters p15, p16, p17;

p15= .5;

p16= .5;

p17= .5;

model;

T = p15*(e+pstar-p) - p16*y + p17*ystar;

end;

initval;

T=0;

end;

varobs T;

estimated_params;

p15, .5, .1, .9;

p16, .5, .1, .9;

p17, .5, .1, .9;

end;

estimation(datafile=data2,mode_compute=4, mh_replic=0);

dynare Model2

Configuring Dynare …

[mex] Generalized QZ.

[mex] Sylvester equation solution.

[mex] Kronecker products.

[mex] Sparse kronecker products.

[mex] Local state space iteration (second order).

[mex] Bytecode evaluation.

[mex] k-order perturbation solver.

[mex] k-order solution simulation.

[mex] Quasi Monte-Carlo sequence (Sobol).

Starting Dynare (version 4.3.0).

Starting preprocessing of the model file …

Found 1 equation(s).

Evaluating expressions…done

Computing static model derivatives:

- order 1

Computing dynamic model derivatives:
- order 1
- order 2

Processing outputs …done

Preprocessing completed.

Starting MATLAB/Octave computing.

You did not declare endogenous variables after the estimation/calib_smoother command.

??? Attempted to access lead_lag_incidence(2,1); index out of bounds because

numel(lead_lag_incidence)=1.

Error in ==> set_state_space at 73

kmask = lead_lag_incidence(max_lag+2,order_var) ;

Error in ==> dynare_estimation_init at 194

dr = set_state_space(oo_.dr,M_);

Error in ==> dynare_estimation_1 at 59

[dataset_,xparam1, M_, options_, oo_, estim_params_,bayestopt_] =

dynare_estimation_init(var_list_, dname, ], M_, options_, oo_, estim_params_,

bayestopt_);

Error in ==> dynare_estimation at 70

dynare_estimation_1(var_list,dname);

Error in ==> Model at 111

dynare_estimation(var_list_);

Error in ==> dynare at 120

evalin(‘base’,fname) ;[/code]

Thanks a lot for any help.