Hi,

I am trying to estimate the RBC model in section 2.3 of this article homepages.nyu.edu/~ts43/research/AP_tom16.pdf. I made a few changes: I added an equation for y=exp(z)*k^alpha*lab^(1-alpha) and I am estimating all 7 of the parameters. I am using detrended GDP data I got from some other Dynare example. I keep getting the following error:

## Improvement on iteration 24 = 0.000002033

f at the beginning of new iteration, -633.1605667791

Predicted improvement: 13.269746463

lambda = 1; f = -620.1507553

SOLVE: Iteration 2

Spurious convergence.

0.8172

0.5460

0.9049

-1.4046

0

lambda = 0.33333; f = -630.9595435

lambda = 0.11111; f = -633.1907086

I kill it, because I have no idea what Spurious convergence means, but it seems that the results will be no good. If I let it run, the mode finding algorithm usually crashes with the error:

??? Error using ==> chol

Matrix must be positive definite.

Error in ==> metropolis_hastings_initialization at 52

d = chol(vv);

Error in ==> random_walk_metropolis_hastings at 43

ix2, ilogpo2, ModelName, MhDirectoryName, fblck, fline, npar, nblck, nruns, NewFile, MAX_nruns, d ] = …

Error in ==> dynare_estimation_1 at 942

feval(options_.posterior_sampling_method,‘DsgeLikelihood’,options_.proposal_distribution,xparam1,invhess,bounds,gend,data);

Error in ==> dynare_estimation at 62

dynare_estimation_1(var_list,varargin{:});

Error in ==> myrbc2 at 140

dynare_estimation(var_list_);

Error in ==> dynare at 102

evalin(‘base’,fname) ;