I tried to write the Gali & Monacelli (2005) small open economy model in levels. The attached the code. However, I encountered the error “The Jacobian of the dynamic model contains Inf. For more information, use options_.debug.” Could anyone help me check where the problem is?

Any help is highly appreciated. Thanks in advance.soe.mod (3.0 KB)

MODEL_DIAGNOSTICS: The Jacobian of the static model contains Inf or NaN. The problem arises from:

Derivative of Equation 4 with respect to Variable s (initial value of s: 1)
Derivative of Equation 9 with respect to Variable s (initial value of s: 1)
Derivative of Equation 10 with respect to Variable s (initial value of s: 1)

Thanks for your reply. I have modified the calibrated values. The error message “The Jacobian of the static model contains Inf or NaN.” has gone, however, I got the error “The generalized Schur (QZ) decomposition failed”. Could you please help me check where the problem comes from?

Thank you very much. Here attached the code.soe2.mod (2.6 KB)