Estimation problems of "Matrix must be positive definite"

[jpfeifer]

See e.g.

Replication Adolfson 2007

You cannot estimate the model with that mod-file. You are neglecting parameter dependence. After running estimation, Dynare will update the estimated parameters but not take any dependence into account that you did not specify. Rather, your calibration only once updates the other parameters depending on the estimated one. That’s why you should use model-local variables (the ones with the pound operator). See Remark 4 (Parameter dependence and the use of model-local variables) in Pfeifer(2013): “…