# Market clearing equation and associated dilemma in estimation **URL:** \ **Category:** ML/Bayesian estimation\ **Created:** [2 July 2019 12:50 UTC](https://forum.dynare.org/t/market-clearing-equation-and-associated-dilemma-in-estimation/14078 "2019-07-02T12:50:56Z")\ **Posts on this page:** 7\ **Page:** 1
**Author:** ![Saurabh](https://forum.dynare.org/letter_avatar_proxy/v4/letter/s/ee7513/32.png) [@Saurabh](https://forum.dynare.org/u/Saurabh)\ **Post date:** [2 July 2019 12:50 UTC](https://forum.dynare.org/t/market-clearing-equation-and-associated-dilemma-in-estimation/14078/1 "2019-07-02T12:50:56Z")
Hello people, Since we cannot estimate all the components of market clearing equation (Y=C+I+G). I have made Y, C and I as observed variable. But in this case, whole of my G dynamics remains un-captured. The mode-check plots also suggests that G is not identified from the data at all. I am surprised why this is happening! What is the way out? Should I make C, I and G as observed ? ---
**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Post date:** [4 July 2019 06:51 UTC](https://forum.dynare.org/t/market-clearing-equation-and-associated-dilemma-in-estimation/14078/2 "2019-07-04T06:51:29Z")
Make all three observed and add measurement error on investment. Then try what happens. ---
**Author:** ![Saurabh](https://forum.dynare.org/letter_avatar_proxy/v4/letter/s/ee7513/32.png) [@Saurabh](https://forum.dynare.org/u/Saurabh)\ **Post date:** [22 July 2019 14:47 UTC](https://forum.dynare.org/t/market-clearing-equation-and-associated-dilemma-in-estimation/14078/3 "2019-07-22T14:47:47Z")
Hello Professor, I dont know by why blanchard kahn conditions are not satisfied in my model. When I make K\_n and K\_p (capital) non-predetermined, code runs well. I dont have any other pre-determined variable. How should I debugg? [BE\_corrected\_rpc\_diffeuler\_uadg\_diff.mod](https://forum.dynare.org/uploads/short-url/tf8pk4SIbfeyJ95lmU3TESg8SJF.mod) (17.6 KB) ---
**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Post date:** [25 July 2019 15:24 UTC](https://forum.dynare.org/t/market-clearing-equation-and-associated-dilemma-in-estimation/14078/4 "2019-07-25T15:24:52Z")
That’s hard to tell. Why do you have three capital stocks? ---
**Author:** ![Saurabh](https://forum.dynare.org/letter_avatar_proxy/v4/letter/s/ee7513/32.png) [@Saurabh](https://forum.dynare.org/u/Saurabh)\ **Post date:** [10 September 2019 05:44 UTC](https://forum.dynare.org/t/market-clearing-equation-and-associated-dilemma-in-estimation/14078/5 "2019-09-10T05:44:53Z")
Because one capital (k) pertains to normal price rigid model block, other (k\_n) pertains to flexible price equilibrium and (k\_p) pertains to model block where all dynamics is due to only persistent growth rate shocks. ---
**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Post date:** [12 September 2019 07:09 UTC](https://forum.dynare.org/t/market-clearing-equation-and-associated-dilemma-in-estimation/14078/6 "2019-09-12T07:09:04Z")
Are those economies separate? I.e. have you tried whether the individiual economies like the flex-price one work? ---
**Author:** ![Saurabh](https://forum.dynare.org/letter_avatar_proxy/v4/letter/s/ee7513/32.png) [@Saurabh](https://forum.dynare.org/u/Saurabh)\ **Post date:** [14 September 2019 04:20 UTC](https://forum.dynare.org/t/market-clearing-equation-and-associated-dilemma-in-estimation/14078/7 "2019-09-14T04:20:32Z")
Thnx Professor for your patience! The code ran, I had log-linearised FOC of capital in a wrong manner.