I am trying to use a DSGE model based on Adolfson 2005 to do forecast.
When I run identification command, there are 25 parameters can not be identified by model, after go through Dynare forums and found solution from this topic: Mode check-shock variance log likelihood kernel is flat, 19 of them can be identified after following jpfeifer’s advice. But I cannot figure out the identification problem in the rest 6 of them, which are :
xi_w ----- Probability with which a worker cannot reoptimize his wage
kappa_w ------Indexation parameter for wages
lambda_m_c_ss ---- Steady state time-varying markup in the imported consumption goods sector
lambda_m_i_ss ---- Steady state time-varying markup in the imported investment goods sector
tau_w_ss ------- Steady-state payroll tax
tau_y_ss ------- Steady-state labour income tax
could you please give me some advice about them? What will cause if we ignore identification problem and do estimation anyway?