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  • DSGE error: equation appears nonlinear

    Dear all,

    I am trying to estimate a DSGE model in Stata 15 and have received the following error message:

    Code:
    equation 21 appears nonlinear
    r(498);
    Equation 21 in this case is
    Code:
    (F.Li=i, state noshock)
    Li then appears only in one equation, the Taylor rule, which I have formulated as
    Code:
    (i={rhoii}*Li+(1-{rhoii})*({phi_pi}*(pif-{pi_target})+{phi_y}*(yf-{y_target}))+ei)
    I have used this type of equation to model lags for several other endogenous variables in my model without a corresponding error message.

    I look forward to receiving some information on this error.

    Many thanks,

    Pauline Pohl
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