A Problem on Steady State Solving

Dear Professor,

Thank you for reading this post.

I’m a new dynare learner and matlab user. My problems are delivered as follows.

(1) I have encountered a problem of solving the steady state of the equation, which is displayed in the attachment, when I try to learn the DSGE model with a shadow banking system. Would you please help me out?

(2) I really have no idea what is the standard of choosing the lagged variables, would you please tell me about it?

Thank you so much!
A Problem on Steady State Solving.doc (155 KB)