Residuals of static equations NaN Nk model with recursive preferences

Steady state
1

Dear all,

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)

Best
Jo

2

You are using EIS in the definition of psi before it was defined.

3

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,
Jo

FinalModelEZW.mod (26.7 KB)

4

You have simulated moments, but simulations may become explosive for large shock sizes without pruning.