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 = betapi(+1)+lambda(y+m);
i = log(beta)+phi_pipi+phi_yy+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.