Hello! I was replicating the paper of Peter Ireland (2004), ‘Technology shocks in the new Keynesian model’.

I have several problems when running the following mod file to do ML estimation.

- After running the results there is some thing wrong like this.

[quote]POSTERIOR KERNEL OPTIMIZATION PROBLEM!

(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.

Warning: The results below are most likely wrong! [/quote]

I have tried different mode_compute 3,4,8,9. And model identification shows that all parameters are identified.But the problem was still there.

2.When I do sto_simul after estimation, there was a warning like this:

[quote]Warning: Some of the parameters have no value (sig_a, sig_e, sig_z, sig_r)

when using stoch_simul. If these parameters are not initialized in a

steadystate file, Dynare may not be able to solve the model… [/quote]

so how to do simulation in this case?

- The shock_decomposition cannot be carried out also. I wonder what i did wrong.

Thx！

gpr_data.m (7.7 KB)

full.mod (2.52 KB)