I’m trying to use osr command in my model but I get the following error:
OPTIMAL SIMPLE RULE
OSR: Initial value of the objective function: Inf
OSR: The initial value of the objective function is infinite.
OSR: Check whether the unconditional variance of a target variable is infinite
OSR: due to the presence of a unit root.
Error using osr1 (line 81)
OSR: Initial likelihood is infinite
Error in osr (line 40)
Error in milit_opt_rule (line 1269)
Error in dynare (line 180)
how I should get rid of this unit root? my model is log-linearized and I’m using two simple rules very similar to that is used in dynare working paper No. 15.