Dear all,

I‘ trying to build a RBC model with multiple stages of production.

I’ve eliminated a lot of the complexity of the setup by simply making production in three stages, with downstream production of goods requiring upstream intermediate products.

But I can not find the steady state value.

The residuals of w(wage) not equal to 0.

Here are 4 conditions of w.

One from household supply side and 3 from 3stage producers demand side.

I know the problem is here, but I don’t know how to fix the 4 conditions. Because all the variables are defined.

I really need some helps. Thank you very much!

Residuals of the static equations:

Equation number 1 : 0 : w

Equation number 2 : 0 : 2

Equation number 3 : 0 : 3

Equation number 4 : 0 : 4

Equation number 5 : 0 : K0

Equation number 6 : 0 : K1

Equation number 7 : 0 : K2

Equation number 8 : 0 : Y0

Equation number 9 : 0 : Y1

Equation number 10 : 0 : Y2

Equation number 11 : 0 : r0

Equation number 12 : 0 : r1

Equation number 13 : 0 : r2

Equation number 14 : -1.2392 : 14

Equation number 15 : -0.65325 : 15

Equation number 16 : -0.90445 : 16

Equation number 17 : 0 : p1

Equation number 18 : 0 : p2

Equation number 19 : 0 : p0

Equation number 20 : 0 : 20

Equation number 21 : 0 : 21

Equation number 22 : 0 : MC0

Equation number 23 : 0 : L

Equation number 24 : 0 : I

Equation number 25 : 0 : 25

Equation number 26 : 0 : 26

dynare_Q.mod (2.7 KB)