Hi all,

First post here and I’m a new user. Great work by the developers!

I’ve been trying to replicate the model from chapter 1 of Evans’ “Exchange Rate Dynamics” (2011).

I have a feeling there’s something wrong in the structure of the model, i.e. inclusion of an irrelevant and exclusion of a relevant equation but I don’t know how to check this explicitly.

It runs but, even with 1 million newton iterations, it can’t find a steady state. It could also be an issue with the initial condition but I have a feeling it is not. I’ve been looking at residuals of eqautions when trying to set it.

So the error exactly is:

Error using print_info (line 74)

Impossible to find the steady state. Either the model doesn’t have a steady state, there are an infinity of steady states, or

the guess values are too far from the solution

Error in steady (line 92)

print_info(info,options_.noprint, options_);

Error in evansv3 (line 323)

steady;

Error in dynare (line 180)

evalin(‘base’,fname) ;

Attached is the LaTeX file listing equations and parameter values and the .mod file.

Thank you,

Basil

categorical.pdf (140 KB)

evansv3.mod (5.79 KB)