# HELP!Why I get so many zeros in variance decomposition

Hi Dynare Experts,

I wrote a code about an open economy with financial shock. I ask four variables to be simulated.
But when I see my result of variance decomposition,I find there are only two variables listed.
Besides, as I have six shocks in the model, four shocks contributes ZERO to the two variables.
So could anyone tell me what might be the reasons?

Jason

Sounds like a problem with the model. Please provide the files to replicate the issue.

fffsolrevise1.mod (8.97 KB)

PS: I tired to change the standard deviation and the result was slightly improved. I am not sure if this is the reason.

Look at the covariance matrix in M_.Sigma_e

[quote] M_.Sigma_e
ans =
30.0304 0 0 0 0 0
0 17.8929 0 0 0 0
0 0 0.0021 0 0 0
0 0 0 0.0000 0 0
0 0 0 0 0.0032 0
0 0 0 0 0 0.0002
[/quote]

The first two shocks are two orders of magnitude larger and thus drive everything.

[quote=“jpfeifer”]Look at the covariance matrix in M_.Sigma_e

[quote] M_.Sigma_e
ans =
30.0304 0 0 0 0 0
0 17.8929 0 0 0 0
0 0 0.0021 0 0 0
0 0 0 0.0000 0 0
0 0 0 0 0.0032 0
0 0 0 0 0 0.0002
[/quote]

The first two shocks are two orders of magnitude larger and thus drive everything.[/quote]

But as I am new to dynare, could you tell me where to find this file?

It is not a file. It is just restating that comparing

to

Implies two order of magnitude difference in your shock calibration.

[quote=“jpfeifer”]It is not a file. It is just restating that comparing

to

Implies two order of magnitude difference in your shock calibration.[/quote]

I also notice that some variables can not be simulated as follows

THEORETICAL MOMENTS

VARIABLE MEAN STD. DEV. VARIANCE
y 0.0000 0.0406 0.0016
c NaN NaN NaN
i NaN NaN NaN
r 0.0000 0.0012 0.0000
pi 0.0000 0.0036 0.0000

So could you tell me what may be the reasons? If I add some shocks, would it work?

Because your model features a unit root so that the second moment of these variables does not exist. Try running model_diagnostics on your model.