I am trying to estimate a model with procyclical leverage in the banking sector. Whether I use mode_compute 4, 6, or 9, I get the following error message:
Error using chol
Matrix must be positive definite.
I have tried to run an identification analysis, in order to see if some parameters are not correctly identified; however, I get:
==== Identification analysis ====
Testing prior mean
Evaluating simulated moment uncertainty … please wait
Doing 492 replicas of length 300 periods.
Simulated moment uncertainty … done!
Error using .*
Matrix dimensions must agree.
Error in identification_analysis (line 225)
deltaM = deltaM.*abs(params’);
I have searched the forum but I didn’t see this issue arising a lot. Please note that my shocks are not correlated. Could someone help?
PC.zip (14.4 KB)