Dear all

I am currently thinking about combining the extended path method (extended_path) with exogenous deterministic variables (varexo_det). It seems to me that this combination should be feasible from a theoretical point of view. However, either I am mistaken, or Dynare doesn’t work for this combination.

If I run a small example (the one from here: [Problem with varexo_det/ forecast + 2nd order approximati), file attached below) with the same variables, model, etc., but apply extended_path instead of stoch_simul, Dynare or Matlab quits with an error. While calling the *dynamic file in the perfect foresight part of each extended path iteration, Dynare tries to access the values for deterministic exogenous variable (x(it*, 3) in the quote below, or e_det in the example), but it seems that the corresponding matrix (x) does - my guess - not include these series, but only those for the ‘regular’ stochastic variables (e and u in the example). Formally, Dynare or Matlab returns:

I’m very grateful for any help or thoughts in either direction - whether I am mistaken theoretically or Dynare doesn’t like this combination (yet). And apologies if I should have missed a similar post.

Best

PS: This quote is based on unstable 4.4.4 (most current version of ZIP file), but the problem also appeared in stable 4.4.3.

example2_A.mod (1.84 KB)