Dear Prof. Johannes Pfeifer,

I am just repeating the estimation code of Iacoviello(2015, RED). I only replace the data of Iacoviello’s, and the code does not work. It reported that:

(minus) the hessian matrix at the “mode” is not positive definite!

=> posterior variance of the estimated parameters are not positive.

You should try to change the initial values of the parameters using

the estimated_params_init block, or use another optimization routine.

I don’t know how to set the initial values of the parameters, could you help me to check it and tell me how to solve it?

Bfbc2.mod (13.9 KB) fbc2_steadystate.m (4.5 KB) MYDATA.mat (3.1 KB) est,

Xiang