Dear all,

I have written two similar models to find the solution of parameters of monetary policies. But both of them can’t run successfully. The error message is as follows.

Error using print_info (line 32)

The steady state has NaNs or Inf.

Error in steady (line 102)

print_info(info,options_.noprint, options_);

Error in estimate_rho.driver (line 356)

steady;

Error in dynare (line 293)

evalin(‘base’,[fname ‘.driver’]) ;

I racked my brain to tackle it but failed. How could I solve this problem? Two .mod files are attached.

estimate_phi.mod (2.0 KB)

estimate_rho.mod (2.1 KB)

Dear Hoshizora,

you did not set initial values for the parameters that you want to estimate.

```
Warning: Some of the parameters have no value (phiu, phip, phiy, phis) when using steady. If these parameters are not initialized in a
steadystate file or a steady_state_model-block, Dynare may not be able to solve the model...
Randomize initial guess...
```

I think this is why it cannot solve it. Before you do estimation, you should make sure that simulation works to see whether the steady state can be found and Dynare runs.

Best

Thanks very much. I set the initial values just now (phiu=0.8; phip=1; phiy=0.5; phis=0.3;). However, more error messages emerged. Could you help me find where the problem lies in? Thanks a million!

The error messages are as follows.

Error using print_info (line 32)

Blanchard & Kahn conditions are not satisfied: indeterminacy.

Error in print_info (line 32)

error(message);

Error in initial_estimation_checks (line 185)

print_info(info, DynareOptions.noprint, DynareOptions)

Error in dynare_estimation_1 (line 164)

oo_ =

initial_estimation_checks(objective_function,xparam1,dataset_,dataset_info,M_,estim_params_,options_,bayestopt_,bounds,oo_);

Error in dynare_estimation (line 105)

dynare_estimation_1(var_list,dname);

Error in estimate_phi.driver (line 385)

oo_recursive_=dynare_estimation(var_list_);

Error in dynare (line 293)

evalin(‘base’,[fname ‘.driver’]) ;

estimate_phi_revised.mod (2.1 KB)

You should check your timing, particularly the one of the state variables. Also, are you sure that

```
Kht+Kft=(1-Delte)*(Kht(-1)+Kft)+Qt;
Kht+Kpt=(1-Delte)*(Kht+Kpt)+It;
```

together make sense (I don’t know your model).

Thanks! I’ll check my model more carefully.