Dear Professor Pfeifer,

I have got three unrelated problems when solving the model. Would you please give any advice ? Thank you very much.

(1) When I was running dynare code, it says “The Jacobian of the static model contains Inf or NaN”. I searched the forum while still cannot find the solution. Would you please take a look ? The code files have been sent through message.

(2) When using CES production function in the model, there are two types of formula:

{{Z}_{t}}={{\left[ \theta {{\left( {{X}_{t}} \right)}^{\frac{\varepsilon -1}{\varepsilon }}}+\left( 1-\theta \right){{\left( {{Y}_{t}} \right)}^{\frac{\varepsilon -1}{\varepsilon }}} \right]}^{\frac{\varepsilon }{\varepsilon -1}}}

or

{{Z}_{t}}={{\left[ {{\theta }^{\frac{1}{\varepsilon }}}{{\left( {{X}_{t}} \right)}^{\frac{\varepsilon -1}{\varepsilon }}}+{{\left( 1-\theta \right)}^{\frac{1}{\varepsilon }}}{{\left( {{Y}_{t}} \right)}^{\frac{\varepsilon -1}{\varepsilon }}} \right]}^{\frac{\varepsilon }{\varepsilon -1}}}

How should I choose the better one ? And also, is there any limitation on the value range of parameter \varepsilon or it could be any value larger than 0 ?

(3) The land variable {l}_{t} in Iacviello and Neri(2010) is fixed and always equal to 1, then why agents in the model could still make decision on it ? How should I understand this behavior ?

Thanks again for your reading and really appreciate your kindness.