Dear all,

I have encountered the following problem while using the second order approximation: When computing the policy function, the the computer stops after having computed the linear approximation. I let it run and after more than nine hours, it then returned the theoretical moments with “NaN” entries - still not having computed the second order parts of the policy function. What does this mean? Would be great if anyone gave me a hint what is going on. Taking the first order approximation worked fine.

I have attached the code. Many Thanks for your help.

Best,

Ansgar

NGstochastic2.mod (3.32 KB)