Index Exceeds Matrix Dimensions

Optimal Policy
1

Hi,

I am currently trying to work on an optimal Ramsey policy for the model in Dynare. I tried using Taylor rule for the same model and the results looked fine with no residuals. The problem now is that when I try to find the optimal Ramsey policy with single instrument(Inflation), I get the following error:

Index exceeds matrix dimensions.

Error in btl_old_ramsey_static (line 168)
residual(1) =
params(43)T11T27^(1-params(12))-params(52)T34params(43)*getPowerDeriv(params(43)*y(1),1+params(11),1)+params(43)y(61)+y(45)(-(params(23)*params(43)*y(11)))+y(43)T54+T54y(40);

Error in evaluate_static_model (line 63)
residuals = feval(fh_static,ys,exo_ss,params);

Error in evaluate_steady_state_file (line 133)
[residuals, check] = evaluate_static_model(ys, exo_ss, params, M, options);

Error in evaluate_steady_state (line 59)
[ys,params,info] = evaluate_steady_state_file(ys_init,exo_ss,M, …

Error in resol (line 104)
[dr.ys,M.params,info] =
evaluate_steady_state(oo.steady_state,M,options,oo,~options.steadystate.nocheck);

Error in stoch_simul (line 89)
[oo_.dr,info,M_,options_,oo_] = resol(0,M_,options_,oo_);

Error in ramsey_policy (line 42)
info = stoch_simul(var_list);

Error in btl_old_ramsey (line 720)
ramsey_policy(var_list_);

Error in dynare (line 223)
evalin(‘base’,fname) ;

As I already have a steady state file from the Taylor rule, I tried using the same steady state file which didn’t work and also the second alternative-
I tried giving the numerical guess values of all the endogenous variables in the initial block and I got the same error. Can anyone please explain which matrix it refers to when it shows “Index exceeds matrix dimension”?

Thank you
Ruthvik

2

Are you using Dynare 4.5?

3

Dear Professor,

Thank you for your prompt reply. I am using Dynare 4.5.3 build.

Regards,
Ruthvik

4

Then I would need to see the files.

5

Dear Professor,

Sorry for a late reply, I want to make sure everything is good and rechecked it.

Please find the attached steady sate files and .mod file.

btl_old_ramsey_steadystate.m (3.3 KB)
BTL_I_NSS.m (2.0 KB)
btl_old_ramsey.mod (7.8 KB)

Regards,
Ruthvik

6

Your steady state file is wrong. It does not return a properly sized vector. The reason is that you have a strange conditioning that

if isfield(M_,'orig_endo_nbr') == 1
NumberOfEndogenousVariables = M_.orig_endo_nbr;
else
NumberOfEndogenousVariables = M_.endo_nbr;
end

But ys should always have length M_.endo_nbr

7

Dear Johannes,

Thank you for a reply, I used the standard steady state file from Dynare forum to get the vector and it worked fine with Taylor rule, Now I tried to change the vector from where the ys are taken, A new error prompted stating

Error using print_info (line 156)
Ramsey: The maximum number of iterations has been reached. Try increasing maxit.

Error in stoch_simul (line 100)
print_info(info, options_.noprint, options_);

Error in ramsey_policy (line 42)
info = stoch_simul(var_list);

Error in btl_old_ramsey (line 720)
ramsey_policy(var_list_);

Error in dynare (line 223)
evalin(‘base’,fname) ;

Can you please explain the cause of the error and is there any problem with the conditional stead state file?

Thanks and Regards,
Ruthvik

8

I would need to see the file

9

Dear Johannes,

Please find the attached files, Also I chose the case of NumberOfEndogenousVariables = M_.orig_endo_nbr; where auxiliary variables are set automatically as I have a different error while I set the NumberOfEndogenousVariables = M_.endo_nbr

Error using eval
Undefined function or variable ‘MULT_1’.

Error in btl_old_ramsey_steadystate (line 163)
eval([‘ys(’ int2str(ii) ') = ’ varname ‘;’]);

Error in evaluate_steady_state_file (line 52)
[ys,check] = h_steadystate(ys_init, exo_ss);

Error in evaluate_steady_state (line 59)
[ys,params,info] = evaluate_steady_state_file(ys_init,exo_ss,M, …

Error in resol (line 104)
[dr.ys,M.params,info] =
evaluate_steady_state(oo.steady_state,M,options,oo,~options.steadystate.nocheck);

Error in stoch_simul (line 89)
[oo_.dr,info,M_,options_,oo_] = resol(0,M_,options_,oo_);

Error in ramsey_policy (line 42)
info = stoch_simul(var_list);

Error in btl_old_ramsey (line 720)
ramsey_policy(var_list_);

Error in dynare (line 223)
evalin(‘base’,fname) ;

btl_old_ramsey_steadystate.m (3.1 KB)
btl_old_ramsey.mod (7.8 KB)
BTL_I_NSS.m (2.0 KB)
Check_old_ramsey.m (7.5 KB)

10

Hi,
I am attaching a corrected steady state file. The problem is that even with your correct conditional steady state file the steady state for the Ramsey problem cannot be found. Are you sure a steady state exists?

btl_old_ramsey_steadystate.m (3.2 KB)