Running Christiano Trabandt Walentin (2011)

Hello dear all,
When I run ctw_employer_surplus.mod of Christiano, Trabandt and Walentin (2011) I get this message:

Error in computing likelihood for initial parameter values

ESTIMATION_CHECKS: There was an error in computing the likelihood for initial parameter values.
ESTIMATION_CHECKS: You should try using the calibrated version of the model as starting values. To do
ESTIMATION_CHECKS: this, add an empty estimated_params_init-block with use_calibration option immediately before the estimation
ESTIMATION_CHECKS: command (and after the estimated_params-block so that it does not get overwritten):

Error using print_info (line 42)
Blanchard Kahn conditions are not satisfied: no stable equilibrium

Error in print_info (line 42)
error(‘Blanchard Kahn conditions are not satisfied: no stable’ …

Error in initial_estimation_checks (line 69)
print_info(info, DynareOptions.noprint, DynareOptions)

Error in dynare_estimation_1 (line 179)
oo_ = initial_estimation_checks(objective_function,xparam1,dataset_,M_,estim_params_,options_,bayestopt_,oo_);

Error in dynare_estimation (line 89)

Error in ctw_employer_surplus (line 2752)

Error in dynare (line 180)
evalin(‘base’,fname) ;

How can I fix this? I would appreciatte it if you could help me, please.

Aldo (1.13 MB)

I can run the file after adjusting the path to the data with both the unstable and 4.4.3. So there must be something you changed.