NAN Error Deterministic Simulation Non-Linear Model

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NAN Error Deterministic Simulation Non-Linear Model

Postby rpaul92 » Thu Mar 16, 2017 6:11 pm

Hi everyone,

I am working on a simple model with migration. The stochastic simulation works fine but for the non-linear model, the deterministic simulation does not converge even with a temporary shock to productivity.

To work around this issue, I log-linearized model by hand and used that for the deterministic simulation and it works fine for temporary shocks. I would prefer to get the non-linear model working because I want to look at transition dynamics after a permanent change in some model parameters which is less convenient to do (if I understand correctly) w/ a log-linearized model since it is linearized around the initial ss.

Additional note: In the investment decision, I am aware of the dynare timing convention, and the investment decision is purposely written differently here which is most closely related to Mandelman and Zlate (2012): https://ideas.repec.org/a/eee/moneco/v5 ... 6-213.html

Please find .mod files for both attached.

Thank you for your help!
Attachments
lin.mod
(5.31 KiB) Downloaded 71 times
nonlin_deterministic.mod
(8.24 KiB) Downloaded 73 times
rpaul92
 
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