Hi, i just started using dynare and im trying to replicate Arias, Hansen and Ohanian (2006).
The first order conditions i derived were:
- d.L/d.c(t) ==> beta^t/c(t) = lambda(t)
- d.L/d.c(t+1) ==> beta^(t+1)/c(t+1)=lambda(t+1)
- d.L/d.n(t) ==> -beta^ttheta(t)log(1-omega-he(t))+lambda(alphaexp(z1)(u(t)k(t))^(1-alpha)(e(t)*u(t)*h)^(alpha-1)*n(t)*h) = 0
- d.L/d.e(t) ==> -(beta^t*(1-n)theta(t)h)/(1-omega-he(t)) + lambda(alphaexp(z1)(u(t)k(t))^(1-alpha)(e(t)*n(t)*h)^(alpha-1)*n(t)*h = 0
- d.L/d.u(t) ==> lambda(t) = lambda(t+1)*((1-alpha)exp(z1)(u(t+1)*k(t+1))^(-alpha)u(t+1)(e(t+1)*n(t+1)h)^(alpha) + (1-gammau(t+1)^(phi)))
- d.L/d.k(t+1) ==> lambda*((1-alpha)exp(z1)(u(t)*k(t))^(-alpha)k(t)(e(t)n(t)h)^(alpha) - gammaphik(t)*u(t)^(phi-1)) = 0
with that, i have the attached .mod file, but when i try to run it, it tells me that there is spurious convergence.
I have not calibrated the model and havent calculated the steady state so some parameters and init values apre probably incorrect. Could this cause the error?
If so, how can i calculate the steady state using matlab?
Thank you everyone,
hansen4.mod (1.33 KB)