Hello, I would be thankful if someone could explain what’s wrong with my code.

here it is:

[code]var y pi i;

varexo d m s;

sigma=1;

beta=0.99;

lambda=0.1;

phi_pi=1.5;

phi_y=0.2;

model;

y = y(+1)-1/sigma*(i-pi(+1)-log(beta))+d;

pi = beta*pi(+1)+lambda*(y+m);

i = log(beta)+phi_pi*pi+phi_y*y+s;

end;[/code]

what I get out is quite strange:

[code]>> dynare 1model.mod

Configuring Dynare …

[mex] Generalized QZ.

[mex] Sylvester equation solution.

[mex] Kronecker products.

[mex] Sparse kronecker products.

[mex] Local state space iteration (second order).

[mex] Bytecode evaluation.

[mex] k-order perturbation solver.

[mex] k-order solution simulation.

[mex] Quasi Monte-Carlo sequence (Sobol).

[mex] Markov Switching SBVAR.

Starting Dynare (version 4.4.1).

Starting preprocessing of the model file …

ERROR: 1model.mod: line 10, cols 13-17: Unknown symbol: sigma

Error using dynare (line 168)

DYNARE: preprocessing failed[/code]

I really don’t understand what’s wrong. Any help is appreciated.