Hello
Assalamu Alaikum
I tried first order linearization by Uhlig (1999) but Dynare suggest that equation is non-linear.
What to do now?
I shall be thankful if you could answer please.
Hello
Assalamu Alaikum
I tried first order linearization by Uhlig (1999) but Dynare suggest that equation is non-linear.
What to do now?
I shall be thankful if you could answer please.
Can you enter the equations non-linearly into Dynare?
I can try it.
Just let me know that should it be entered with exponential or just in plain manner?
Thank you for quick response.
First try without exp(), only add the model works.
In fact I have worked on the model as:
What do you mean by “But I could not get the posterior” and then “Still I did not try with data”? Those are two different statements.
It is difficult to say what is the best way for you then. Maybe there is a mistake in that equation then?
With basic model I tried the data. But there was some problem. Dynare produced no results.
Then I kept working on the model and added the financial accelerator. At this stage, results of the stedy state were generated. After that I tried to go ahead with the addition of remaining equations of the financial market and policies. Here one single equation is not working due to the linearity.
My question is that:
I don’t get it. If you linearized manually, but Dynare tells you an equation is not linear, then you did a mistake in the linearization. You would need to fix it.
In terms of approach, if the easy model cannot be estimated, you should debug that before moving on to something more complicated.