Dear all,

I’m trying to simulate an open economy new keynesian model as in Lubik & schorfheide JME (2007) and many others.

I keep getting the following error message:

??? Error: Unexpected MATLAB expression.

Error in ==> dynare at 26

evalin(‘base’,fname) ;

Any idea on what’s going on? Below is my .mod file.

Any help is greatly appreciated.

Thanks,

Rodrigo

===============================================

periods 1000;

var y, phi, r, q, exch, A, phistar, ystar;

varexo er, eq, eystar, ephistar, ez;

parameters beta, tau, k, alpha, rhor, rhoq, rhoystar, rhophistar, rhoz, gamma1, gamma2, gamma3;

beta=0.96;

tau=0.5;

k=0.5;

alpha=0.10;

rhor=0.5;

rhoq=0.4;

rhoystar=0.9;

rhophistar=0.8;

rhoz=0.2;

gammma1=1.5;

gammma2=0.25;

gammma3=0.25;

model(linear);

y=y(+1)-(tau+alpha*(2-alpha)*(1-tau))*(r-phi(+1))-rhoz*(A-A(-1))-alpha*(tau+alpha*(2-alpha)*(1-tau)) q(+1)+alpha(2-alpha)*((1-tau)/tau)

*(ystar);*

phi=betaphi(+1)+alpha

phi=beta

*beta*q(+1)-(alpha

*q)+(k/(tau+alpha*(2-alpha)

*(1-tau)))*(y+alpha*(2-alpha)

*((1-tau)/tau)*(gamma1

*ystar);*

r=rhorr(-1)+(1-rhor)r=rhor

*phi+gamma2*y+gamma3

*exch)+er;*

exch=phi-(1-alpha)

A=A(-1)+ez;

phistar=rhophistarphistar(-1)+ephistar;

exch=phi-(1-alpha)

*q-phistar;*

q=rhoqq(-1)+eq;q=rhoq

A=A(-1)+ez;

phistar=rhophistar

ystar=rhoystar*ystar(-1)+eystar;

end;

shocks;

var er; stderr 0.01;

var eq; stderr 0.01;

var ez; stderr 0.01;

var eystar; stderr 0.01;

var ephistar; stderr 0.01;

end;

stoch_simul(drop=200);