Hi,
I am writing a version of Smets and Wouters (2007) model adjusted from stochastic de-trending rather than deterministic. However, I want to run the estimations under the optimization routine 4 or 1. but when i run it im getting the usual error of:
Error using chol
Matrix must be positive definite.
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Error in dynare (line 120)
evalin('base',fname) ;
The error gets solved when i run it for mode_compute=6. However, '6' solves it for local optimization rather than global. Therefore, can anyone please tell me how to get rid of this error while using the optimization routine 4 or 1? I have also used the first estimation results which i get for the Posterior Maximization (using routine 4) to reset my initial values and priors accordingly but it doesnt help.
I have attached the .mod file and data file (xls format). Also the .mod file reads the data from .mat but i cannot upload .mat format file.
Thanks a lot.