Thank you very much for your previous help, I am grateful.
I have drawn 7 observed variables in Dynare, and I find the plot of observed effective federal funds rate has multiple green curves along it while the remaining observed variables do not exhibit such obvious features, and I also find historical decomposition of observed effective federal funds rate look strange, is this an indication of some problem with observed effective federal funds rate? or is there potential problem with measurement equation of interest rate or state equations?
Please have a look atPlot.pdf (384.6 KB)
the PDF attachment.
Thank you very much and look forward to hearing from you.
Are you using Dynare 4.5.3?
No, I am still using Dynare 4.4.3, but will use 4.5.3 later
That should explain it. Your model features stochastic singularity, which shows up in the interest rate.