selfmademodel2_log_crra.mod (663 Bytes)
I’m a new learner of DSGE and this is a modified version of the standard DSGE model(I change the original logutility function into a log+CRRA one). Thus I cannot find calibration for “sigma” in the textbook so I set one myself and it got the error saying:
The Jacobian matrix evaluated at the steady state contains elements that are not real or are infinite
Error check (line 76)
print_info(info, 0, options);
Error selfmademodel2_log_crra (line 161)
oo_.dr.eigval = check(M_,options_,oo_);
Error dynare (line 235)
evalin(‘base’,fname) ;
Is it because of my calibration or some other problem??Plz help me, thank u guys very much!
(btw:sigma is the relative risk aversion and sigmaa is the standard error of e)
Hi,
I think there is more than one problem in your mod file.

The timing of the variables is wrong. Predetermined variables must be in t1. For instance, the capital stock in the production function should be K(1)
and not K
. You have the same problem in the law of motion for the capital stock which should be:
K=(1delta)*K(1)+I;
and not
K(+1)=(1delta)*K+I;

The Euler equation (the fourth equation) looks wrong. First there are again timing issues: (i) the return of capital should be expected (R(1)
instead of R
), (ii) the consumption ratio should be shifted one period in the future (C(1)/C
instead of C/C(1)
). Also the depreciation rate is missing and the elasticity of the marginal utility \sigma is not where it should be (it should be a power on the consumption ratio).

Maybe the value of \sigma is to low.
You should first check your model…
Best,
Stéphane.
thank u stephane, I’ve checked my model euqation and there were indeed a mistake and I got my IRF. However it is not about the timing issues, I think according to my previous equations they are correct, so maybe there are problems about my previous equations? Hope u can tell me! Thank u again!