Hi everyone, hi @jpfeifer.
I tried to write a non-linear DSGE model but dynare gives me the following error: The Jacobian of the dynamic model contains Inf. I state that the last 6 equations are linear, because I don’t know corresponding to the non-linear equations. what is the problem?
The non-linear model is: model.mod (1.3 KB)

The corresponding linearized model runs, but gives wrong results. The linear model is: nek.mod (2.0 KB)
The linear model generates an increase in lambda and a reduction in the release, after an expansionary monetary shock, which is wrong. I thank in advance anyone who can help me with one of the two models to get the right results.

Don’t declare your model to be linear. It is not linear anymore. Also, do not log-linearize zero steady state variables like pz = 0;
Also, almost all of your equations are still the linearized ones. That is not goal.

Thanks so much for your reply. I tried, i replaced nonlinear equations but i get nonzero residuals. I don’t know the nonlinear equations of the phillips curve (dp), flexible price output (yf) and output gap (x) but I have written them as a function of the nonlinear variables. linear.mod (1.8 KB)