You have the latest DynareOBC release. Cleaning up. Not using the mex version of spkron. Not using the mex version of ptest. Not using the mex version of AltPTest. Not using the mex version of QuickPCheck. Performing first dynare run to perform pre-processing. Configuring Dynare ... [mex] Generalized QZ. [mex] Sylvester equation solution. [mex] Kronecker products. [mex] Sparse kronecker products. [mex] Local state space iteration (second order). [mex] Bytecode evaluation. [mex] k-order perturbation solver. [mex] k-order solution simulation. [mex] Quasi Monte-Carlo sequence (Sobol). [mex] Markov Switching SBVAR. Using 64-bit preprocessor Starting Dynare (version 4.5.6). Starting preprocessing of the model file ... Preprocesser stopped after macroprocessing step because of 'onlymacro' option. Searching the pre-processed output for non-differentiable functions. Performing second dynare run to get the steady-state. Configuring Dynare ... [mex] Generalized QZ. [mex] Sylvester equation solution. [mex] Kronecker products. [mex] Sparse kronecker products. [mex] Local state space iteration (second order). [mex] Bytecode evaluation. [mex] k-order perturbation solver. [mex] k-order solution simulation. [mex] Quasi Monte-Carlo sequence (Sobol). [mex] Markov Switching SBVAR. Using 64-bit preprocessor Starting Dynare (version 4.5.6). Starting preprocessing of the model file ... WARNING: in the 'steady_state_model' block, variable 'xi_2' is not assigned a value WARNING: in the 'steady_state_model' block, variable 'xi_1' is not assigned a value WARNING: you are using a function (max, min, abs, sign) or an operator (<, >, <=, >=, ==, !=) which is unsuitable for a stochastic context; see the reference manual, section about "Expressions", for more details. ERROR: There are 11 equations but 10 endogenous variables! Cleaning up. Error using dynare (line 229) DYNARE: preprocessing failed Error in dynareOBCCore (line 188) dynare( 'dynareOBCTemp2.mod', basevarargin{:} ); Error in dynareOBCSetup (line 297) dynareOBC_ = dynareOBCCore( InputFileName, basevarargin, dynareOBC_, @() EnforceRequirementsAndGeneratePath( Update, OriginalPath, CurrentFolder, dynareOBCPath, InputFileName, varargin{:} ) ); Error in dynareOBC (line 711) dynareOBCSetup( OriginalPath, CurrentFolder, dynareOBCPath, InputFileName, varargin{:} );