There is an asterisk missing in the first equation, but you have it listed twice…what is happening there?

In any case, the first equation has the gross interested rate advanced while in the second equation it is not advanced. What does your model say it should be?

Seems your government equation is also missing an asterisk.

D seems to be “debt”? Can I ask what function this variable serves? You have taxes; why not just assume a balanced budget. It seems that physical capital “K” is pinning down “R” in the first Euler, but then are you attempting to pin down “r” in the second Euler using the shock to government expenditure?

You need to give us a little more to go with here…

Hello everyone, changing the values for initval, actually made it work. Changing the initial values made it work. Thank you everyone for your response.

Maybe, one additional question here, how to go about making dynare code run if one is not very sure about the initial values, is there a way to go about it. Any help here is much appreciated.