Bayesian estimation problem in DSGE model

[jpfeifer]

Simply write your own steady state file. See

Incorporating matlab function into dynare

To cut the long story short: if you have a file to compute the steady state values, do not use initval, but write a full-fledged steady state file. An example is in Dynare 4.4.2 for the NK_baseline.mod. You just need to copy your steady state computation file in between the header and footer of that file and rename the file according to the naming conventions.

Of course, you should use the current Dynare version.