Dear Prof. Pfeifer,

I am attempting to solve the Ramsey policy of a rent-seeking policymaker in a DSGE model with heterogenous households and firms. Upon solving with Dynare 4.5.7, I get the warning and error messages saying:

warning: division by zero

…

error: Ramsey: The steady state file computation for the Ramsey problem resulted in NaNs at the initial values of the instruments.

II have attached the codes. Please could you help go through it to point out the source(s) of this error?

csae3.mod (2.7 KB)