Dear Michel,

Thanks for your comments. Following are the problems I am facing in executing this model

Warning: File ‘SmetsWouters2003/Output’ not found.

In CheckPath at 42

In dynare_estimation_1 at 665

In dynare_estimation at 62

In SmetsWouters2003 at 330

In dynare at 120

Warning: File ‘SmetsWouters2003/metropolis’ not found.

In CheckPath at 42

In metropolis_hastings_initialization at 46

In random_walk_metropolis_hastings at 58

In dynare_estimation_1 at 871

In dynare_estimation at 62

In SmetsWouters2003 at 330

In dynare at 120

??? Error using ==> chol

Matrix must be positive definite.

Error in ==> metropolis_hastings_initialization at 52

d = chol(vv);

Error in ==> random_walk_metropolis_hastings at 58

ix2, ilogpo2, ModelName, MhDirectoryName, fblck, fline, npar, nblck,

nruns, NewFile, MAX_nruns, d ] = …

Error in ==> dynare_estimation_1 at 871

feval(options_.posterior_sampling_method,‘DsgeLikelihood’,options_.proposal_distribution,xparam1,invhess,bounds,gend,data,…

Error in ==> dynare_estimation at 62

dynare_estimation_1(var_list,varargin{:});

Error in ==> SmetsWouters2003 at 330

dynare_estimation(var_list_);

Error in ==> dynare at 120

evalin(‘base’,fname) ;