Occbin solver loops between two regimes


I am having trouble with solving my model. For many combinations of parameter values I use, I keep getting the error message, “Occbin solver loops between two regimes.”

What does it mean to have a loop between two regimes? According to Guerrieri and Iacoviello (2015), what Occbin is doing is, first guess that after T periods, the economy returns to the reference regime. Then for periods 1 to T-1, you guess the sequence of regimes that the economy goes through and verify the guess. Where is the possibility that there is a loop between the two regimes? Even if there is a shifting in regimes, it should only be temporary and end when the economy reaches (the correctly guessed) period T.

Thank you!

Often, it’s a numerical issue. See