Hi everyone,

I was trying to run this example from Practicing Dynare paper(can be downloaded from Sargent webpage ) and I have got a n error that I don’t know how to solve (since I am recently using Dynare). Someone could help me please? this is the error message:

Configuring Dynare …

[mex] Generalized QZ.

[mex] Sylvester equation solution.

[mex] Kronecker products.

[mex] Sparse kronecker products.

[mex] Bytecode evaluation.

[mex] k-order perturbation solver.

[mex] k-order solution simulation.

Starting Dynare (version 4.2.5).

Starting preprocessing of the model file …

WARNING: TwoCountryEst.mod:1.1-12: periods: this command is now deprecated and may be removed in a future version of Dynare. Please use the “periods” option of the “simul” command instead.

Found 8 equation(s).

Evaluating expressions…done

Computing static model derivatives:

- order 1

Computing dynamic model derivatives: - order 1
- order 2

Processing outputs …done

Preprocessing completed.

Starting MATLAB/Octave computing.

STEADY-STATE RESULTS:

c1 0.823947

c2 0.823947

k1 2.89526

k2 2.89526

a1 0

a2 0

y1 1.15811

y2 1.15811

You did not declare endogenous variables after the estimation command.

This version of Dynare cannot estimate non linearized models!

Set “order” equal to 1.

??? Error using ==> inverse_gamma_specification at 121

inverse_gamma_specification:: Failed in solving for the hyperparameters!

Error in ==> set_prior at 224

[bayestopt_.p6(k(i)),bayestopt_.p7(k(i))] = …

Error in ==> dynare_estimation_init at 124

[xparam1,estim_params_,bayestopt_,lb,ub,M_] = set_prior(estim_params_,M_,options_);

Error in ==> dynare_estimation_1 at 37

[data,rawdata,xparam1] = dynare_estimation_init(var_list_);

Error in ==> dynare_estimation at 62

dynare_estimation_1(var_list,varargin{:});

Error in ==> TwoCountryEst at 150

dynare_estimation(var_list_);

Error in ==> dynare at 120

evalin(‘base’,fname) ;

TwocountryEst.mod (1016 Bytes)