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can dynare solve this linear system?

PostPosted: Fri Jul 02, 2010 3:59 am
by blackeif
i want to use dynare to solve a linear system like this(some parameters may not be used in the model):
-----------------------------------the line.mod-----------------------------------------
var y i pai q qstar;
varexo eps1 eps2 eps3 eps4;
parameters a1 a2 phi beta sigma1 sigma2 b1 b2 gama1 gamma1s gama2 gama3 gama4 r pais;
a1 = 0.4;
a2 = 0.1;
phi = 0.8;
beta = 0.1;
sigma1 = 0.4;
sigma2 = 0.8;
b1 = 0.5;
b2 = 0.3;
gama1 = 0.8;
gama1s = 3;
gama2 = 0.1;
gama3 = 0.1;
gama4 = 0.85;
r = 0.035;
pais = 0.025;
model(linear);
qstar = sigma2*y(+1)-sigma1*(i-pai(+1))+eps3;
pai = (1-phi)*pai(+1)+phi*pai(-1)+beta*y+eps2;
y = y(+1)-a1*(i(-1)-pai)+a2*q(-1)+eps1;
q = (b1-b2)*q(-1)-b1*(q(-2)+b2*qstar;
i = (1-gama4)*(r+pai+gama1*(pai)+gama2*y+gama3*(q-qstar))+gamam4*i(-1)+eps4;
end;
initval;
qstar = 1;
pai = 0;
y = 0.1;
q = 1;
i = 0;
shocks;
var eps1; stderr 0.01;
var eps2; stderr 0.01;
var eps3; stderr 0.01;
var eps4; stderr 0.01;
end;
steady;
check;
stoch_simul(periods=2100);
-----------------------------------------------------------------------
however, the matlab said "qstar is an unrecognized symbol", the linear system is from"Should Monetary Policy Respond to Asset Price Misalignments?" with a little adjustment. i can not figure out whether the reason is dynare can not solve this type system or it is my wrong coding. could somebody help me with this problem?

Re: can dynare solve this linear system?

PostPosted: Fri Jul 02, 2010 6:46 am
by jpfeifer
Code: Select all
q = (b1-b2)*q(-1)-b1*(q(-2)+b2*qstar;

misses a bracket at the end.

Code: Select all
i = (1-gama4)*(r+pai+gama1*(pai)+gama2*y+gama3*(q-qstar))+gamam4*i(-1)+eps4;

gamam4 should be gama4

The initval block misses an end;

Re: can dynare solve this linear system?

PostPosted: Fri Jul 02, 2010 7:37 am
by blackeif
thank you in advance. the dynare run it well.