Dear all,

I’m trying to run Sargent’s codes from (Practicing Dynare) under dynare 4.2.4 and non of the codes seem to work under it.

In running (sargent77Bayes.mod) file, i get the following error massage:

This version of Dynare cannot estimate non linearized models!

Set “order” equal to 1.

Loading 34 observations from cagan_data.mat

Error in computing likelihood for initial parameter values

??? Error using ==> print_info at 39

Blanchard Kahn conditions are not satisfied: no stable equilibrium

Error in ==> initial_estimation_checks at 101

print_info(info, options_.noprint)

Error in ==> dynare_estimation_1 at 122

initial_estimation_checks(xparam1,gend,data,data_index,number_of_observations,no_more_missing_observations);

Error in ==> dynare_estimation at 62

dynare_estimation_1(var_list,varargin{:});

Error in ==> sargent77Bayes at 121

dynare_estimation(var_list_);

Error in ==> dynare at 120

evalin(‘base’,fname) ;

The code runs just fine under dynare 4.0.4, but does any one know how can I fix it and make it work under dynare 4.2.4? thanks alot

I am attaching the file and the data and I appreciate your help.

Sargent 1977.rar (1.69 KB)