hi,

I am new to Dynare and just tried to replicate the example in Chapter 3 of the User Guide.

For the mod file below Dynare stopped the process with the error message:

Starting Dynare (version 4.1.2).

Starting preprocessing of the model file …

ERROR: dynare.mod:3.1-6: syntax error, unexpected VAREXO

??? Error using ==> dynare at 126

DYNARE: preprocessing failed

I haven’t seen any other thread with the same error message, so I assume that I just made a stupid mistake. Still it would be nice, if you could point out, what I did wrong.

Thanks in advance

**Mod file**

var y c k i l y_l w r z;

varexo e;

parameters beta psi delta alpha rho sigma epsilon;

alpha = 0.33;

beta = 0.99;

delta = 0.023;

psi = 1.75;

rho = 0.95;

sigma = (0.007/(1-alpha));

epsilon = 10;

model;

1/c = beta*(1/c(+1)*(1+r(+1)-delta));
psi*c/(1-l) = w;

c+i = y;

y=k(-1)^alpha*(exp(z)

*l)^(1-alpha);*

w = (1-alpha)

r = alphay/k(-1)*((epsilon-1)/epsilon);

w = (1-alpha)

*y/l*((epsilon-1)/epsilon);r = alpha

i = k-(1-delta)

*k(-1);*

y_l = y/l;

z = rhoz(-1)+e;

y_l = y/l;

z = rho

end;

initval;

k = 9;

c = 0.76;

l = 0.3;

w = 2.07;

r = 0.03;

z = 0;

e = 0;

end;

steady;

check;

shocks;

var e = sigma^2

end;

stoch_simul (periods=2100);