Hi,

I’m running a simple RBC model with monopolistic competition and Stone-Geary preferences and try to estimate parameter b (subsistence consumption) using US data for consumption. Here is the code

%preliminary data

cons = xlsread (‘consumption’, 1, ‘A1:A154’);

nobs = 154;

cr = ones(nobs,1);

tr = (1:nobs)’;

for i=1:nobs

tr2(i) = tr(i)^2;

end;

log_cons=log(cons)

const = FOLS(log_cons,[cr tr tr2’]);

c = log_cons-const.beta(2)*tr-const.beta(3)*tr2’; % eliminate quadratic trend

save rawdata_US_1977Q1_2016q3 c;

var c, k, L, A, Y ;

varexo zz ;

parameters alpha, beta, delta, teta, phi, vi, b, niz, n ;

alpha = 0.333; %capital share to match labor share of 2/3 in US KR, 1999 is 0.333;

teta = 6; %elasticity of substitution for goods

phi = 2; %Frisch elasticity, in KR and BGM 4, in villaverde-ramirez 0.85

beta = 0.99; %in KR 0.984

delta = 0.025;

niz = 0.979;

b = 1.19;

vi = 8.15;

n = 2.015;

model;

k=(1-delta)*k(-1)+exp(A) k(-1)^alphaL^(1-alpha)-n*c;

% L=(((1-alpha)*exp(A) k(-1)^alpha)/((c-b)vi))^(phi/(1+alphaphi)); %perf comp*vi))^(phi/(1+alpha*phi)); %mon comp

L=(((1-alpha)exp(A)(k(-1)^alpha))((teta-1)c-bteta)/((c-b)^2

%(c-b)^(-1)=beta*(1+alpha*exp(A(+1)) k^(alpha-1)L(+1)^(1-alpha)-delta)((c(+1)-b)^(-1)); %perf comp*(1+alpha*exp(A(+1))

((teta-1)c-bteta)(c-b)^(-2)=beta

*k^(alpha-1)*(c(+1)-b)^(-2)); %mon comp

*L(+1)^(1-alpha)-delta)*(((teta-1)*c(+1)-b*teta)A=niz*A(-1)+zz;

Y=exp(A)*L^(1-alpha)*k^alpha;

end;

initval;

c = 2.1914529;

L = 0.0608807939;

k = 91.041666655;

A = 0;

Y = 0.0608;

end;

shocks;

var zz = 0.0072^2;

end;

estimated_params ;

b, normal_pdf, 1.19, 0.375;

end;

varobs c;

%estimated_params_init(use_calibration);

%end;

estimation(datafile=rawdata_US_1977Q1_2016q3, first_obs=1,nobs=70,mode_compute=5,mode_check,mh_replic=10000,mh_nblocks=2,mh_jscale=0.65,mh_init_scale=0.5,bayesian_irf,moments_varendo) c ;

%estimated_params_init(use_calibration);

%end;

The following error appears:

**Error using schur

First input must be square.

**

I have tried other options for computing the mode. When I run the same code on an earlier version of dynare, it works!

many thanks for any help