Dynare forums

There is a fixed stock of 1 unit of money in the economy, which may be held by either firms or consumers. Introducing depreciation would move the steady state to a point of 0 money stock.

Probably you should take a look into Schmitt-Grohe/Uribes "Closing small open economy models" (http://econ.duke.edu/~grohe/research/closing_jie.pdf). The problem of non-stationarity of asset holdings in small open economies seems to be related to your problem. They show different modeling options to close the model and render it stationary.

Thanks for your suggestions. I ended up getting rid of the unit root by putting a 10^-4 tax on money, rebating it lump sum to agents. I compared the resulting theoretical moments with the simulated moments in the model without the tax (and hence with the unit root) and found they were almost identical. I think this may be a case in which the simulated moments are in fact correct. For now I'm sticking with the theoretical moments because they take significantly less CPU time.

The remaining question is about the 3rd order expansion. It isn't working on my Mac. When I specify order 3 I get this message

ERROR: When using option 'k_order_solver' (which is implicit if order >= 3), you must specify option 'use_dll' on the 'model' block

when I change "model;" to "model(use_dll);" I get

/Applications/MATLAB_R2009b.app/bin/mex: line 1107: gcc-4.0: command not found
/Applications/MATLAB_R2009b.app/bin/mex: line 997: gcc-4.0: command not found

Any guesses what's going on?

Good morning Mr Jpfeifer .First I would like to wish you happy new year , then I would like to ask you about an error in dynare that I meet ..I read many messages in dynare that are like this problem but I could not solve the issue .Here is my mod file and my data.Can you help me?
Sorry for disturbing you again Mr jpfeifer .

??? Subscripted assignment dimension mismatch.

Error in ==> read_variables at 79
dyn_data_01(:,dyn_i_01) = dyn_tmp_01;

Error in ==> initialize_dataset at 32
rawdata = read_variables(datafile,varobs,[],xls.sheet,xls.range);

Error in ==> dynare_estimation_init at 477
dataset_ = initialize_dataset(options_.datafile,options_.varobs,options_.first_obs,options_.nobs,transformation,options_.prefilter,xls);

Error in ==> dynare_estimation_1 at 81
[dataset_,xparam1, hh, M_, options_, oo_, estim_params_,bayestopt_] = dynare_estimation_init(var_list_, dname, [], M_, options_, oo_, estim_params_,
bayestopt_);

Error in ==> dynare_estimation at 84
dynare_estimation_1(var_list,dname);

Error in ==> article4 at 365
dynare_estimation(var_list_);

Error in ==> dynare at 174
evalin('base',fname) ;

Your datafile erroneously uses a comma as the decimal separator for some variables. When you execute your data file, some variables have dimension N by 2 instead of N by 1 because of this.