Performing an estimation of parameters using real data

Estimation ML/Bayesian estimation
21

I am using dynare 4.5.1. Should I use an earlier version? Or how should I solve this issue.

22

Please provide the files

23

Hi Professor,
I guess you are talking about the mod file and the data file. If that is true, see the attached compressed folder containing the .mod file and the data file.Files.zip (7.6 KB)

24

Your observation equation is wrong. Your data has a mean of 625, but the corresponding model variable has a mean of 0.15.

25

Ok! Now my question is how do I fix this issue. I read your document on the observation equation but I still have a difficulty implementing it. I would appreciate any hint you could provide with to successfully perform the estimation.
Thanks

26

You need to understand where that difference comes from. What is your data and how was it treated? And what does the steady state of the model variables represent?

27

Hello Professor!
From the hint you provided me, I understand that I need to work on the data to map them with the simulated or what the model can simulate. However, I would appreciate if you could provide me with more clues on the issue. I have been reading you paper on the observation equation but I could not find my way out.
Thank you