problems in Bayesian estimationn of a benchmark model

[dongji87]

Hi,everyone, I am simulating a log-linearized model, which is based on Fernandeze benchmark model, and very like Smets-Wouters(2007), I conducted bayesian estimation and faced the following problems, hope you can help me, Thanks!

>> dynare gov

Configuring Dynare ...
[mex] Generalized QZ.
[mex] Sylvester equation solution.
[mex] Kronecker products.
[mex] Sparse kronecker products.
[mex] Bytecode evaluation.
[mex] k-order perturbation solver.
[mex] k-order solution simulation.

Starting Dynare (version 4.2.1).
Starting preprocessing of the model file ...
Found 26 equation(s).
Evaluating expressions...done
Computing static model derivatives:
- order 1
Computing dynamic model derivatives:
- order 1
Processing outputs ...done
Preprocessing completed.
Starting MATLAB/Octave computing.

Residuals of the static equations:

Equation number 1 : 0
Equation number 2 : 0
Equation number 3 : 0
Equation number 4 : 0
Equation number 5 : 0
Equation number 6 : 0
Equation number 7 : 0
Equation number 8 : 0
Equation number 9 : 0
Equation number 10 : 0
Equation number 11 : 0
Equation number 12 : 0
Equation number 13 : 0
Equation number 14 : 0
Equation number 15 : 0
Equation number 16 : 0
Equation number 17 : 0
Equation number 18 : 0
Equation number 19 : 0
Equation number 20 : 0
Equation number 21 : 0
Equation number 22 : 0
Equation number 23 : 0
Equation number 24 : 0
Equation number 25 : 0
Equation number 26 : -1.012


STEADY-STATE RESULTS:

pie 0
w 0
g1 0
g2 0
k 0
R 0
y 0
c 0
vp 0
q 0
x 0
lam 0
r 0
pie_st 0
l 0
mc 0
d 0
phi 0
mu 0
A 0
ksi 0
y_obs 0
c_obs 0
x_obs 0
w_obs 0
pie_obs 1.012

??? Error using ==> eig
Input to EIG must not contain NaN or Inf.
Error in ==> dr1 at 369
dr.eigval = eig(e,d);

Error in ==> resol at 147
[dr,info,M_,options_,oo_] = dr1(dr,check_flag,M_,options_,oo_);

Error in ==> check at 46
[dr, info] = resol(oo_.steady_state,1);

Error in ==> gov at 240
check;

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


My questions are:

1. what should i do with "Input to EIG must not contain NaN or Inf”? i know it is the problem of jacobian, but how to check where the model is wrong?

2. how to write the observationequation for inflation? All variables in the model is stationary, and the model is log linearized. the way i deal with date is like smet(2007). For inflation, I take logs, seasonally adjusted, and multiply by 100, but i did not take differences. then i tried the several ways: (1)pie_obs=pie_bar*(1+pie); (2)pie_obs=pie_bar+pie; (3) pie_obs= pie+ log(pie_bar); These are not ok(inequalities like the red mark above); However, when I tried: (4) pie_obs=pie, equality occurs. why? i think the 1st should be right.

Hope you can help me! Many Thanks!

Qingyin Ma