Objective function at mode: -1338.222158 POSTERIOR KERNEL OPTIMIZATION PROBLEM! (minus) the hessian matrix at the "mode" is not positive definite! => posterior variance of the estimated parameters are not positive. You should try to change the initial values of the parameters using the estimated_params_init block, or use another optimization routine. Warning: The results below are most likely wrong! > In dynare_estimation_1 at 694 In dynare_estimation at 89 In DISPLAY_ONE at 899 In dynare at 180 MODE CHECK Fval obtained by the minimization routine: -1338.222158 Warning: Matrix is close to singular or badly scaled. Results may be inaccurate. RCOND = 9.738495e-017. > In dynare_estimation_1 at 709 In dynare_estimation at 89 In DISPLAY_ONE at 899 In dynare at 180 RESULTS FROM POSTERIOR ESTIMATION parameters prior mean mode s.d. prior pstdev a_one 1.104 0.1657 0.3184 gamm 1.0000 a_two 1.110 0.2730 0.0000 gamm 1.0000 a_zero 1.100 0.1363 0.0000 gamm 1.0000 fx_m 2.000 2.0000 0.0000 gamm 0.0010 fx_e 10.000 8.3689 0.0000 norm 1.0000 fx_r 0.500 0.5082 1.0371 norm 1.0000 omo_r 0.500 0.5598 1.0229 norm 1.0000 omo_pie 0.500 0.4814 1.0063 norm 1.0000 phi_gdp 0.200 0.1942 0.0000 beta 0.0500 phi_b 0.100 0.0941 0.0000 beta 0.0200 mu_r 0.700 0.6483 0.0889 beta 0.2000 mu_h 1.500 1.2102 0.0000 unif 0.8660 mu_gdp 0.000 -0.0000 0.0000 unif 0.5774 rho_a 0.800 0.8093 0.0335 beta 0.1000 rho_c 0.800 0.8461 0.0999 beta 0.1000 rho_i 0.800 0.7155 0.0780 beta 0.1000 rho_g 0.800 0.9737 0.0076 beta 0.1000 rho_f 0.800 0.8018 0.0626 beta 0.1000 rho_yf 0.800 0.8355 0.0715 beta 0.1000 rho_pie_star 0.800 0.7842 0.1018 beta 0.1000 rho_uip 0.800 0.8409 0.0964 beta 0.1000 rho_rf 0.800 0.8419 0.0970 beta 0.1000 rho_t 0.800 0.8494 0.1012 beta 0.1000 rho_dr 0.800 0.7247 0.0499 beta 0.1000 rho_cap 0.800 0.5791 0.0819 beta 0.1000 rho_r 0.800 0.8814 0.0537 beta 0.1000 rho_res 0.800 0.8558 0.0454 beta 0.1000 h 0.500 0.2931 0.1321 beta 0.2000 eta_c 1.000 0.4012 0.0000 invg 5.0000 sigma_l 1.000 0.0000 0.0000 gamm 1.0000 si 0.500 0.7771 0.1202 beta 0.2500 theta_i 1.000 0.4299 0.0000 invg 5.0000 fi_h 0.750 0.8516 0.0232 beta 0.1000 fi_f 0.750 0.7817 0.1041 beta 0.1000 risk_B 0.010 0.0000 0.0000 gamm 0.0100 risk_res 0.010 0.0000 0.0000 gamm 0.0100 risk_e 0.500 0.4672 0.0000 beta 0.1500 standard deviation of shocks prior mean mode s.d. prior pstdev eps_a 0.005 0.0129 0.0021 invg Inf eps_rf 0.001 0.0005 0.0001 invg Inf eps_c 0.001 0.0005 0.0001 invg Inf eps_pie_star 0.001 0.0206 0.0056 invg Inf eps_m 0.005 0.0013 0.0002 invg Inf eps_i 0.050 0.0146 0.0031 invg Inf eps_g 0.010 0.0043 0.0014 invg Inf eps_uip 0.001 0.0005 0.0001 invg Inf eps_t 0.010 0.0047 0.0019 invg Inf eps_f 0.001 0.0227 0.0047 invg Inf eps_dr 0.050 0.0136 0.0030 invg Inf eps_cap 0.050 0.0128 0.0022 invg Inf eps_tar 0.001 0.0005 0.0002 invg Inf eps_res 0.050 0.1015 0.0285 invg Inf eps_c_obs 0.010 0.0068 0.0032 invg Inf eps_x_obs 0.010 0.0439 0.0063 invg Inf eps_gdp_obs 0.010 0.0043 0.0013 invg Inf eps_gov_obs 0.010 0.0742 0.0083 invg Inf eps_imp_obs 0.010 0.0417 0.0064 invg Inf eps_inv_obs 0.010 0.0173 0.0040 invg Inf eps_pie_obs 0.010 0.0072 0.0008 invg Inf eps_l_obs 0.010 0.0075 0.0019 invg Inf eps_d_obs 0.010 0.0218 0.0025 invg Inf eps_depr_obs 0.010 0.0359 0.0049 invg Inf eps_ecb_obs 0.010 0.1048 0.0123 invg Inf eps_lrate_obs 0.010 0.0017 0.0002 invg Inf eps_reer_obs 0.010 0.0212 0.0064 invg Inf eps_reserv_obs 0.010 0.0045 0.0017 invg Inf Log data density [Laplace approximation] is 932.232738. ??? Error using ==> chol Matrix must be positive definite. Error in ==> metropolis_hastings_initialization at 68 d = chol(vv); Error in ==> random_walk_metropolis_hastings at 62 [ ix2, ilogpo2, ModelName, MetropolisFolder, fblck, fline, npar, nblck, nruns, NewFile, MAX_nruns, d ] = ... Error in ==> dynare_estimation_1 at 782 feval(options_.posterior_sampling_method,objective_function,options_.proposal_distribution,xparam1,invhess,bounds,dataset_,options_,M_,estim_params_,bayestopt_,oo_); Error in ==> dynare_estimation at 89 dynare_estimation_1(var_list,dname); Error in ==> DISPLAY_ONE at 899 dynare_estimation(var_list_); Error in ==> dynare at 180 evalin('base',fname) ;