Dear all,

I have been experiencing some problem with the estimation of my model, though model_diagnostics, steady, check, and identification test have been successful.

At first, I used mode 6 to estimate the model and got the “Error using ==> chol??? Matrix must be positive definite after the scaling step. Error in ==> gmhmaxlik at 196”. Since I could not find the source of that error in my data, I switched to “mode_compute =8, mh_jscale=0.3”. I got an error message “Log data density [Laplace approximation] is NaN. MH: I couldn't get a valid initial value in 100 trials. MH: You should Reduce mh_init_scale...MH: Parameter mh_init_scale is equal to 0.400000. Enter a new value...” I entered new values at the prompt but at some point I got the error message “Matrix dimensions must agree.” At this point, I could not get why Dynare have set “mh_init_scale is equal to 0.400000” to start with while it should have been 2*0.3=0.6 according to the Reference Manual.

Next, I decided to change “mh_jscale” to different values in the estimation option but Dynare still sent out an error message where “MH: Parameter mh_init_scale is equal to 0.400000.”

Now, I don’t know what to do. I cannot estimate the model. Is the error coming from my code or from the computing mode? I would really appreciate is someone can take the time to see what is going on here.