Uribe & Yue (2003)

General DSGE Modeling Replication Attempts
1

Hello Guys!
I have been working on translating his matlab code Uribe & Yue (2003) (posted on his personal page) to dynare. However I got this error:

*Found 24 equation(s). *
*Evaluating expressions… *
*Computing static model derivatives (order 1). *
*Normalizing the static model… *
*Finding the optimal block decomposition of the static model… *
*3 block(s) found: *

  • 2 recursive block(s) and 1 simultaneous block(s). *
  • the largest simultaneous block has 22 equation(s) *
  •                             and 22 feedback variable(s). *

*Computing dynamic model derivatives (order 2). *
*Normalizing the dynamic model… *
*Normalization failed with cutoff, trying symbolic normalization… *
Could not normalize the dynamic model. Variable k is not in the maximum cardinality matching.

I share my attempt of translation here;
version3.mod (5.4 KB)
Any sort of help would be appreciate it !

2

You did not finish the mod-file. The part

lambda_ss = ;
ddac_ss = ; 
ac_ss = ;

is incomplete. After that, there are problems with capitalization of names etc.

3

Dear professor, what do you mean with the capitalization of names?

4

You define

beta = 1/R;        // Discount factor

but only r was defined. Also, that cannot be the first statement in a file because the object on the right has not yet been defined.

5

version3.mod (4.9 KB)
This is my last version and I am confused, I get the following error:
Found 24 equation(s).
Evaluating expressions…
Computing static model derivatives (order 1).
Normalizing the static model…
Normalization failed with cutoff, trying symbolic normalization…
Finding the optimal block decomposition of the static model…
3 block(s) found:
2 recursive block(s) and 1 simultaneous block(s).
the largest simultaneous block has 22 equation(s)
and 22 feedback variable(s).
Computing dynamic model derivatives (order 2).
Normalizing the dynamic model…
Normalization failed with cutoff, trying symbolic normalization…
Could not normalize the dynamic model. Variable k is not in the maximum cardinality matching.
Preprocessing completed.
Preprocessing time: 0h00m00s.

Residuals of the static equations:
Equation number 1: ddac : -0.001989
Equation number 2: rd : -0.001217
Equation number 3: 3 : 0.049469
Equation number 9: 9 : -0.001313
Equation number 11: 11 : 0.053210
Equation number 22: 22 : 0.074843

Warning: Some of the parameters have no value (tb_ss, C_ss, w_ss, u_ss, S0_ss, S1_ss, S2_ss, S3_ss) 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. Note that simul, perfect_foresight_setup, and perfect_foresight_solver do not automatically call the steady state
file.

Residuals of the static equations:
Equation number 1: ddac : -0.001989
Equation number 2: rd : -0.001217
Equation number 3: 3 : 0.049469
Equation number 4: u : 0.000000
Equation number 5: ac : 0.000000
Equation number 6: 6 : 0.000000
Equation number 7: tby : 0.000000
Equation number 8: k : 0.000000
Equation number 9: 9 : -0.001313
Equation number 10: lambda : 0.000000
Equation number 11: 11 : 0.053210
Equation number 12: 12 : 0.000000
Equation number 13: i : 0.000000
Equation number 14: 14 : 0.000000
Equation number 15: 15 : 0.000000
Equation number 16: 16 : 0.000000
Equation number 17: 17 : 0.000000
Equation number 18: 18 : 0.000000
Equation number 19: 19 : 0.000000
Equation number 20: 20 : 0.000000
Equation number 21: 21 : 0.000000
Equation number 22: 22 : 0.074843
Equation number 23: 23 : 0.000000
Equation number 24: y : 0.000000

6

The message indicates that the entered steady state does not match the equations. You need to keep debugging.