GH3.mod (4.1 KB) GH3_ss.m (1.8 KB) GH3_steadystate.m (1.5 KB) param_GH.m (837 Bytes) Dear professor, I am doing a two sector model with banks. The model could run now.However, when I want to use the variance of some variables, I found that the var in “oo” block is NAN or 0, I don’t know why, co…

Variance is NAN or zero

jpfeifer October 22, 2022, 8:21am 2

See

NaN AND inf in my steady state Dynare help (legacy posts)

All of this is explained by the presence of a unit root. In this case your IRFs will have permanent effects and the unconditional second moments for the non-stationary variables do not exist, i.e. are NaN. Check whether the unit root is a feature of your model. Search the forum for more on this. There is no universal solution.

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