Dear all,
I am trying to solve my model under discretionary policy but the following error is appeared:
“Discretionary policy: NaN elements are present in the solution. Procedure failed.”
If I add the command “check;” before the command for discretion, the following error is appeared:
“Subscripted assignment dimension mismatch.
Error in stochastic_solvers (line 182)
b(:,cols_b) = jacobia_(:,cols_j);”
I attach my .mod file in case which someone wants to have a look in order to understand where the problem is. Just to give you the general picture of what I have/haven’t done:
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When I solve for stoch_simul or for osr, the Taylor rule (equation for the nominal interest rate) is present. When I calculate the optimal policy (Ramsey/discretion), I delete the Taylor rule. That is, when I solve for the optimal policy, I have one equation less. This is consistent with the suggestions of Dynare guide). We should get rid of the taylor rule when solve for optimal policy.
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Ramsey policy seems to work. Only discretion is problematic.
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I choose one instrument. I have tried many variables as instruments but no one works. I also tried more than one instruments. They do not work as well.
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The “model(linear);” command is used as it is required for discretion
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The planner objective is quadratic (some terms are in ^2 and some others are displayed as a product but this should be fine)
Thank you very much in advance,
discretion policy.mod (19.9 KB)