estimation_data.xlsx (19.8 KB)
Hi,
I try to estimate my model using Bayesian estimation method. The problem is that when I try to add one more parameter to be estimated I get this error:
POSTERIOR KERNEL OPTIMIZATION PROBLEM!
(minus) the hessian matrix at the “mode” is not positive definite!
=> posterior variance of the estimated parameters are not positive.
You should try to change the initial values of the parameters using
the estimated_params_init block, or use another optimization routine.
Warning: The results below are most likely wrong!

The problem arises when I add, for example, habit parameter in an estimation.
Here is my .mod file.

Your steady_state_model-block is not valid. It only works for the initial value of h=0.6. That explains the problem. The red dots indicate that no steady state was found.