Hello, I’m new at DSGE modelling and I’m trying to replicate Horvath and Yang (2022) * Unemployment dynamics and informality in small open economies*. I have the 12 equations and 12 endogenous variables, but I do not know how to compute three exogenous variables in my code. These are: inter, zi and zf and follow (in this first replication) the same process:

x_t = rho_x*x_{t-1} + eps_x

If i compute those three equations in the model block, Dynare does not compute. The error is there is 20 equations and 17 endogenous variables, and I understand that the difference is caused by the three exogenous variables that are defined in the model block. But, in addition to that, I only define 12 endogenous variables and I do not know why it shows me 17.

This is my code.

HY.mod (2.6 KB)