I apologize for starting a new topic on an unsolved old one, but it seems that my followups on the old topic are not seen by anyone.
I still haven’t been able to figure out why I am getting a “trends incompatible with balanced growth” error in the attached Model1.mod file. Every equation seems balanced. I’m not asking you to debug the code, I’m just wondering if there’s some other explanation for why I’m getting this error. I tried changing the balanced_growth_test_tol, but that didn’t help. Also, note that the equation tagged by the error message is “chi=1/c” and the growth factors of chi and c are inverses.
I noted in the earlier thread that when I supply a steady state model as in Model2.mod, I am able to solve the model and do simulations, but I’m concerned that the error with the initval block is indicating some problem with the model. Thanks. Model1.mod (3.9 KB) Model2.mod (5.4 KB)
My impression is that the derivation engine is very sensitive in this case. You copy and pasted the steady state to initival, but did not use all digits. Hence, chi=1/c does not hold. I used
for var_iter=1:M_.endo_nbr
fprintf('%s=%15.10f;\n',M_.endo_names{var_iter},oo_.dr.ys(var_iter))
end
to print the steady state from the second file and pasted it into initval. In that case, the model runs: ModelBGP1.mod (4.1 KB)
Thank you! Glad it’s just a numerical issue. But does this mean that I will need to supply a steady_state_model block to get an exact steady state in order to get past the BGP check? I haven’t usually had to do that, even for similar two-sector models. Something about this particular model requires that?