There are lots of warnings when I add observed variables and estimation block in my model. The Warning is “Matrix is close to singular or badly scaled. Results may be inaccurate”.
There are no problems when I simulate the results of shock.
code1112A.mod (8.3 KB)
However, warnings appear when I add observed variables and estimation block in my model.
code1112A1.mod (9.2 KB)
sm1115.xlsx (11.3 KB)
Though there are lots of warnings, the MODEL_DIAGNOSTICS command show “No obvious problems with this mod-file were detected”.
I wonder whether there are some problems in my model.
It seems your model is running into issues when one tries to change
mode_check-plots look rather strange. What is the interpretation of that parameter? Is it expected to introduce such complex dynamics?
Thanks for your reply！
My model is used for steel industry. The parameter
theta_s is elasticity of substitution between the capital-labor composite and iron ore. I want to estimate this parameter by
bayesian estimation. Could you give me some advice?
Could you give me some advice about this problem? Thanks a lot!
Have you checked whether that parameter is well-identified? Most often, people calibrate those parameters.
Thanks. I try to check it.
I use the
identification command and get this figure. I think this parameter is well-identified.
Can this result be accepted? What should I do next？
Thanks in advance!
No, they are different. I add a shock in this code, then the paremeter can be identified. However, the
mode_check -plots look rather strange.
If this parameter can satisfy
mode check, and
diagnostic，how can I deal with these warnings?
The warnings are something you may ignore. I am more worried by the strange
Thanks a lot! Your reply is very helpful to me. I’ll try to change the prior distribution and observed data.