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I am trying to run the source code for Dynare working paper #7 with v. 4.2.1 and I get the following:

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Warning: Divide by zero.
> In mze1_static at 14
  In resol at 100
  In dynare_estimation_1 at 90
  In dynare_estimation at 62
  In mze1 at 997
  In dynare at 132


...followed by many more of the above error, then...

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STEADY:  numerical initial values incompatible with the following equations
  Columns 1 through 15

     1     2     3     4     5     6     8     9    13    14    15    16    17    18    19

  Columns 16 through 30

    20    21    22    23    26    27    28    29    30    31    32    33    34    37    38

  Columns 31 through 45

    40    41    43    51    61    62    63    64    65    66    68    69    70    71    72

  Columns 46 through 58

    73    75    77    80    81    82    83    84    85    88    90    91    92

??? Error using ==> dynare_solve at 94
exiting ...

Error in ==> resol at 102
                    [steady_state,check1] =
                    dynare_solve(fh,steady_state,options_.jacobian_flag,...

Error in ==> dynare_estimation_1 at 90
    [dd,info] = resol(oo_.steady_state,0);

Error in ==> dynare_estimation at 62
    dynare_estimation_1(var_list,varargin{:});

Error in ==> mze1 at 997
dynare_estimation(var_list_);

Error in ==> dynare at 132
evalin('base',fname) ;


The only modification I made to the .mod file was to delete the use_dll option. What am I doing wrong?

Hi, I am not able to reproduce this error message (with or without use_dll option). Are you sure that the file mze_steadystate.m is in the same directory than mze.mod ? Also if you rename mze.mod you have to change the name of the steadystate file. Otherwise Dynare does not use the analytical steady state provided in this routine (and crashes without this information because the initial values for the endogenous variables are not set correctly in this mod file).

Best, Stéphane.