I love the mode_check option in Dynare’s estimation command. I’ve found it really useful. But initially I was confused by the way that parameters which cause instability or multiple solutions are plotted as flat lines, just a little bit higher than the mode.
If you replace the mode_check.m in your Dynare 4.0.2 matlab folder with the one attached here, then parameter values in unacceptable regions are plotted in red, just to make it clear that the model is close to a cliff.
Hope you find it useful.
mode_check.m (8.21 KB)