Hi…

I am doing my M.phil thesis thesis on optimal inflation rate through New Keynesian DSGE models with monopolistic competitive firms. I have solved the model and now i am unable to write its coding in dynare. Please give me direction how to write the model in dynare which equation and which variables i have to be write in dynare.

Nasir Gondal

Take a look at Gali’s textbook and the corresponding mod-file on my homepage.

I found the error titled:

"STEADY: The Jacobian contains Inf or NaN. The problem arises from:

STEADY: Derivative of Equation 4 with respect to Variable y (initial value of y: 0.56)

STEADY: Derivative of Equation 1 with respect to Variable c (initial value of c: 0.98)

STEADY: Derivative of Equation 2 with respect to Variable c (initial value of c: 0.98)

STEADY: Derivative of Equation 3 with respect to Variable c (initial value of c: 0.98)

STEADY: Derivative of Equation 5 with respect to Variable c (initial value of c: 0.98)

STEADY: Derivative of Equation 2 with respect to Variable m (initial value of m: 0.68)

STEADY: Derivative of Equation 2 with respect to Variable p (initial value of p: 0.56)

STEADY: Derivative of Equation 5 with respect to Variable p (initial value of p: 0.56)

STEADY: Derivative of Equation 1 with respect to Variable i (initial value of i: 0.92)

STEADY: Derivative of Equation 4 with respect to Variable i (initial value of i: 0.92)

STEADY: Derivative of Equation 3 with respect to Variable n (initial value of n: 50)

STEADY: Derivative of Equation 6 with respect to Variable n (initial value of n: 50)

STEADY: Derivative of Equation 10 with respect to Variable n (initial value of n: 50)

STEADY: Derivative of Equation 5 with respect to Variable w (initial value of w: 20)

STEADY: Derivative of Equation 12 with respect to Variable pi (initial value of pi: 0.85)

STEADY: Derivative of Equation 12 with respect to Variable psi (initial value of psi: 0.77)

STEADY: The problem most often occurs, because a variable with

STEADY: exponent smaller than 1 has been initialized to 0. Taking the derivative

STEADY: and evaluating it at the steady state then results in a division by 0.

??? Error using ==> dynare_solve at 60

An element of the Jacobian is not finite or NaN

Error in ==> evaluate_steady_state at 66

[ys,check] = dynare_solve([M.fname ‘_static’],…

Error in ==> resol at 104

[dr.ys,M.params,info] = evaluate_steady_state(oo.steady_state,M,options,oo,0);

Error in ==> stoch_simul at 88

[oo_.dr,info,M_,options_,oo_] = resol(0,M_,options_,oo_);

Error in ==> yasir1 at 221

info = stoch_simul(var_list_);

Error in ==> dynare at 180

evalin(‘base’,fname) ;

How can I solve it. Any suggestion.

Use an initval block. If that does not help, post the mod-file

Hi.

I am facing the same problem after incorporating the initval.

New Keynesian model with monopolistic competitive firms as developed by Carl E Walsh.

I attached the .mod file with name yasir1.mod

yasir1.mod (848 Bytes)

Dynare is case-sensitive. You get the message

[quote]Warning: Some of the parameters have no value (alpha, rho, eta, zeta, gamma, sigma, phi) when using stoch_simul. If these parameters are not initialized in a

steadystate file or a steady_state_model-block, Dynare may not be able to solve the model… [/quote]

You need to fix this. For example, you use alpha, but you only set the parameter Alpha.

Hi…

i got the error option

The Jacobian contains Inf or NaN. The problem arises from:

will be thankful for assistance.

Mod file is attached.

There is nothing attached.