Too many shocks are calibrated with 0 variance

Estimation ML/Bayesian estimation
1

Please help!

I am attempting to estimate some parameters in the Gertler Karadi 2011 model. The model was calibrated before and was perfectly working. After changing the .mod file for estimation, the error message says that too many shocks are calibrated with 0 variance. I have 6 shocks and 6 observables. What can be the issue?

FA_CP1.zip (25.1 KB)

2

You never set the variance of the shocks using a shocks-block. You are trying to estimate sigma_ parameters that never show up.