Semi-colon error

General DSGE Modeling
1

Hello

Below is the equation I am facing error in. What’s wrong with the syntax (precisely semi-colon) here?

reer = czeta1 * reer (-1) + (1 - czeta1) * reer (+1) - ((r - E* inflation (+1)) - (rworld + CRP - E * (infworldexp (+1))) - czeta2 * (nfa/gdp) + eps_reer;

dynare apica.mod
Using 64-bit preprocessor
Starting Dynare (version 4.6.1).
Calling Dynare with arguments: none
Starting preprocessing of the model file …
ERROR: apica.mod: line 69, col 154: syntax error, unexpected ‘;’

Error using dynare (line 282)
Dynare: preprocessing failed

2

((r - E* inflation (+1)) seems wrong. One bracket is missing or you don’t need one bracket. Try changing to (r - E* inflation (+1)) or ((r - E* inflation (+1)))

3

thankyou very much. it worked.

please help me with another equation:
CRP = ckappa1 * v - ckappa2 * b + ckappa3 * (nfa/gdp)(-1) + eps_CRP;

dynare apica.mod
Using 64-bit preprocessor
Starting Dynare (version 4.6.1).
Calling Dynare with arguments: none
Starting preprocessing of the model file …
ERROR: apica.mod: line 70, col 54: syntax error, unexpected ‘(’

Error using dynare (line 282)
Dynare: preprocessing failed

the error in col54 is (nfa/gdp)(-1) … whats wrong here. this is col 54 part of the line .

please help

4

(nfa/gdp)(-1) seems wrong. Are both nfa and gdp variables or parameters? And also, is your model linear? It seems you are using the lag operator wrongly.

5

Hello
Thank you for responding.

Bda and gdp are both variables. And the model is linear .
Please guide me how am i using the lag operator wrong .

Awaiting response.

Thanks

6

For example, if you want to lag gdp, you do gdp(-1). By the way, you can not divide variables in a linear model. You should apply log linearization and make it linear.

7

okay thank you so much . It actually worked.
Please guide me with another equation .

consump = ceta1 * consump (-1) - ceta2 * (rhouse - E * (inflation(+4) )+ ceta3 * houseinc - ceta4 * reer + eps_consump;

dynare apica.mod
Using 64-bit preprocessor
Starting Dynare (version 4.6.1).
Calling Dynare with arguments: none
Starting preprocessing of the model file …
ERROR: apica.mod: line 72, col 117: syntax error, unexpected ‘;’

Error using dynare (line 282)
Dynare: preprocessing failed

Awaiting your response. Thank you

8

okay there was a bracket error which never closed. figured.

Thank you

9

Hello . My model and the error follows :

model;
68)r= cbeta1 * r(-1) - cbeta2 * r(-2) + (1- cbeta1 +cbeta2)(cbeta3 (E inflation(+4))-(E*( infl_tar(+4))) + infl_tar(+4)) + eps_r;
69)rhouse = calpha1* rhouse(-1) - calpha2 * rhouse (-2) + calpha3 * r + calph4 * s + eps_rhouse;
70)rfirm = cgamma1 * rfirm(-1) + cgamma2 * (1/4 * r_total) + cgamma3* CRP + eps_rfirm;
71)reer = czeta1 * reer (-1) + (1 - czeta1) * reer (+1) - (r - E* inflation (+1)) - (rworld + CRP - E * (infworldexp (+1))) - czeta2 * (nfa/gdp) + eps_reer ;
72)CRP = ckappa1 * v - ckappa2 * b + ckappa3 * b(-1) + eps_CRP;
73)AD = ciota1 * consump + ciota2 * inv + ciota3 * govcons + ciota4 * x - ciota5 * m;
74)consump = ceta1 * consump (-1) - ceta2 * (rhouse - E * (inflation(+4))) + ceta3 * houseinc - ceta4 * reer + eps_consump;
75)inv = ctheta1 * inv (-1) - ctheta2 ( rfirm (-1) - E (inflation(+3)) ) + ctheta3 * AD (-1) - ctheta4 * ( 1/2 * reer_total) - ctheta5 * CRP (-3) + eps_inv;
76)x = cxi1 * ( 1/2 * m_total) - cxi2 * ( 1/2 * a_total) + cxi3 * reer (-1) + eps_x;
77)m = cmu1 * m (-1) + cmu2 * AD - cmu3 * reer(-1) + eps_m;
78)inflation = crho1 * inflation (-1) + (1 - crho1) * inflation (+4) + crho2 * ulc(-1) + crho3 * reer (-1) + crho4 * ( 1/2 * AD_total) + eps_inflation;
79)ulc = w - (AD - N);
80)w = ctau1 * w(-1) + ctau2 * AD - ctau3 * (1/3 * unemp_total) - ctau4 * inflation(-1) + eps_w;
81)n = Labour( 1- unemp);
82)unemp = cphi1 * unemp (-1) - cphi2 * AD - cphi3 * AD (-1) - cphi4 * (1/4 * unemp_total) + eps_unemp;
83)capul = comega1 * capul (-1) + comega2 * AD - comega3 (1/4 inv_total) + eps_capul;
84)rpinv = cpsi1 * rpinv (-1) + cpsi2 * reer + eps_cpinv;

end;

dynare apica.mod
Using 64-bit preprocessor
Starting Dynare (version 4.6.1).
Calling Dynare with arguments: none
Starting preprocessing of the model file …
ERROR: apica.mod: line 68, cols 59-83: Symbol cbeta3 is being treated as if it were a function (i.e., takes an argument that is not an integer).
ERROR: apica.mod: line 75, cols 28-70: Symbol ctheta2 is being treated as if it were a function (i.e., takes an argument that is not an integer).
ERROR: apica.mod: line 83, cols 47-70: Symbol comega3 is being treated as if it were a function (i.e., takes an argument that is not an integer).
ERROR: apica.mod: line 68, col 67: Unknown symbol: E
ERROR: apica.mod: line 68, col 86: Unknown symbol: E
ERROR: apica.mod: line 68, cols 90-101: Unknown symbol: infl_tar
ERROR: apica.mod: line 68, cols 107-118: Unknown symbol: infl_tar
ERROR: apica.mod: line 69, cols 70-75: Unknown symbol: calph4
ERROR: apica.mod: line 69, col 79: Unknown symbol: s
ERROR: apica.mod: line 70, cols 48-54: Unknown symbol: r_total
ERROR: apica.mod: line 71, col 61: Unknown symbol: E
ERROR: apica.mod: line 71, cols 83-88: Unknown symbol: rworld
ERROR: apica.mod: line 71, col 98: Unknown symbol: E
ERROR: apica.mod: line 71, cols 103-118: Unknown symbol: infworldexp
ERROR: apica.mod: line 71, cols 134-136: Unknown symbol: nfa
ERROR: apica.mod: line 71, cols 138-140: Unknown symbol: gdp
ERROR: apica.mod: line 72, cols 7-13: Unknown symbol: ckappa1
ERROR: apica.mod: line 72, col 17: Unknown symbol: v
ERROR: apica.mod: line 72, col 31: Unknown symbol: b
ERROR: apica.mod: line 72, cols 45-49: Unknown symbol: b
ERROR: apica.mod: line 73, cols 49-55: Unknown symbol: govcons
ERROR: apica.mod: line 74, col 52: Unknown symbol: E
ERROR: apica.mod: line 74, cols 83-90: Unknown symbol: houseinc
ERROR: apica.mod: line 75, col 51: Unknown symbol: E
ERROR: apica.mod: line 75, cols 112-121: Unknown symbol: reer_total
ERROR: apica.mod: line 76, cols 20-26: Unknown symbol: m_total
ERROR: apica.mod: line 76, cols 46-52: Unknown symbol: a_total
ERROR: apica.mod: line 78, cols 123-130: Unknown symbol: AD_total
ERROR: apica.mod: line 79, col 17: Unknown symbol: N
ERROR: apica.mod: line 80, cols 49-59: Unknown symbol: unemp_total
ERROR: apica.mod: line 82, cols 76-86: Unknown symbol: unemp_total
ERROR: apica.mod: line 83, cols 61-69: Unknown symbol: inv_total
ERROR: apica.mod: line 83, cols 74-82: Unknown symbol: eps_capul
ERROR: apica.mod: line 84, cols 45-53: Unknown symbol: eps_cpinv

Error using dynare (line 282)
Dynare: preprocessing failed

A)ALL THE UNKNOWN SYMBOLS ARE VARIABLES, THE VALUES OF WHICH I HAVE IN THE DATABASE I CREATED. HOW DO I SOLVE THEM HERE ?
B) ALSO THE FIRST THREE ERRORS OF MY PARAMETERS MENTIONED AS FUNCTIONS. HOW DO I SOLVE THIS ?

PLEASE HELP

10

Not sure if your model is really linear. But if it is, then you should be using model(linear);, not model;. Secondly, you have unknown symbols because you did not declare them as variables under the variables block.

It seems you are new to MatLab and dynare. Kindly check this website to practice a simple model, and then you can build your own model afterward. If something is unclear in this link, you can share here. Happy learning!!

11

Thank you so much for replying. Means a lot.

12

Thank You . But I have checked this link before and unfortunately it doesnt solve my problem. Also, i have twice studied Willi’s Youtube tutorials on dynare.

Could you please guide me how do I create equations for all those unknown variables. To mention them in the endogenous variable block, i will have to create equations for them. could you please help me with that ?

Awaiting your response.

Thanks

13

Number of endogenous variables should always match the number of equations in the model. In the example below, there are 8 endogenous variables and 8 equations. If you add J to the first equation - UC = betta*UCp*(1-delt+R) + J;, dynare will throw up unknown symbol:J because it is not declared here var Y C K L A R W I. If you want to keep J as part of the model, you should include it in the variable block like this var Y C K L A R W I J. You now have 9 endogenous variables so you should add one more non-redundant equation to the model so that number of endogenous variables (9) = the number of equations (9).

By the way, you should not just check the example, you should practice it in dynare. Get some simple models, practice with it, before building your own model. Here is a tutorial (NTG8.pdf (1.1 MB) ). Read it, practice with it, and then apply that knowledge to build your own model. It is a step by step approach. You can find many others on the internet.

Your problem is kinda very basic and that it seems this is your first time using dynare:). That is why I suggest practicing simple models first in dynare. Don’t just copy-paste the codes, read through the tutorial I sent, you will get the full picture of how to run models in dynare.

var Y C K L A R W I;
varexo eps_A;
parameters alph betta delt gam pssi rhoA;

alph = 0.35; betta = 0.99; delt = 0.025; gam = 1; pssi = 1.6; rhoA = 0.9;

model;
    #UC  = gam*C^(-1);
    #UCp = gam*C(+1)^(-1);
    #UL  = -pssi*(1-L)^(-1);
    UC = betta*UCp*(1-delt+R);
    W = -UL/UC;
    K = (1-delt)*K(-1)+I;
    Y = I+C;
    Y = A*K(-1)^alph*L^(1-alph);
    W = (1-alph)*Y/L;
    R = alph*Y/K(-1);
    log(A) = rhoA*log(A(-1))+eps_A;
end;
14

Thank you for your response and guidance. I shall practice and ask you if I face any problem.
I knew that number of endogenous variables should equal number of equations. Hence , couldn’t figure how to create non-redundant equations for those unknown variables .

Thank you again. I will study this and ask you again.

15

Non redundant equations should be derive from the optimization decisions of agents in the model, like other equations. Maybe you could share pdf of your model. Is it a variant of RBC, NK, or some standard DSGE model?

16

Thank you for your response again. The model is a reduced form version of the current generation of dynamic stochastic general equilibrium (DSGE) model with new Keynesian features.

17

DSGE model with Keynesian features tutorials are here: https://sites.google.com/site/valerionispi/dsges . pdf guide with mod file.

18

Thank you. could you please help me decode these two errors?

82)inv = ctheta1 * inv (-1) - ctheta2 ( rfirm (-1) - (inflation(+4)) ) + ctheta3 * AD (-1) - ctheta4 * ( 1/2 * reer(+4)) - ctheta5 * CRP (-3) + eps_inv;

90)capul = comega1 * capul (-1) + comega2 * AD - comega3 (1/4* (inv(-4))) + eps_capul;

dynare apica.mod
Using 64-bit preprocessor
Starting Dynare (version 4.6.1).
Calling Dynare with arguments: none
Starting preprocessing of the model file …
WARNING: apica.mod:2.8-130: Symbol eps_inv declared twice.
ERROR: apica.mod: line 82, cols 28-67: Symbol ctheta2 is being treated as if it were a function (i.e., takes an argument that is not an integer).
ERROR: apica.mod: line 90, cols 47-70: Symbol comega3 is being treated as if it were a function (i.e., takes an argument that is not an integer).

19
20

thank you . my model is complete now. im moving forward with the analysis. if i face any problem, i shall ask on the forum.

thank you again for responding.