I am trying to write a model with disaster risk and recursive preferences. I already tried the model with CRRA preferences which worked for me but with recursive preferences the following error occurs:
Residuals of the static equations:
Equation number 1 : 0
Equation number 2 : 0
Equation number 3 : NaN
Equation number 4 : NaN
Equation number 5 : 0
Equation number 6 : NaN
Equation number 7 : 0
Do you have any recommendations on what’s wrong with my model? Thanks in advance for your help.
Here is my .mod file:
FinalModelEZW.mod (26.4 KB)
You are using
EIS in the definition of
psi before it was defined.
Thank you Professor Pfeifer for the quick answer. The model is now working.
However, if I set the standard deviation of my shocks too high I do not get numerical results but only NaN.
As you might already assume from my first mistake I am a rookie in Dynare. Does that mean there is a fundamental error somewhere in my code? For example, eps_dis=0.06 delivers some results but eps_dis=0.6 only produces NaN.
Thanks in advance,
FinalModelEZW.mod (26.7 KB)
You have simulated moments, but simulations may become explosive for large shock sizes without pruning.