I try to solve the Schmitt_Grohe and Uribe (2003) EDEIR model using Professor Pfeifer’s code. I am able to solve the model using annual calibration but as soon as I change the calibration to quarterly, the code doesn’t work and gives the following error:

Error using print_info (line 83)

Impossible to find the steady state. Either the model doesn’t have a steady state, there are an infinity of steady states, or the

guess values are too far from the solution

Error in steady (line 104)

print_info(info,options_.noprint, options_);

Error in PS2_2 (line 268)

steady;

Error in dynare (line 235)

evalin(‘base’,fname) ;

I don’t know what is the reason for it. I am attaching my mod file. Currently it’s with annual calibration (delta = 0.1, rstar = 0.04 and beta = 0.9605) and it works perfectly. But as soon as I change these values to delta = 0.025, rstar = 0.01 and beta = 0.9901, the codes gives the above error. Is there anything else I need to do to chnage the model to quarterly from annually? I am trying this code exercise because I want to calibrate this model to match quarterly business cycle data. So first I am trying if my model works or not. I have tried all the other plausible values of other parameters but I think the main problem is with delta. Any help with this would highly be appreciated. Thanks in advance!SGUEDEIR.mod (1.8 KB)