Changed one variable, can't find steady state anymore

General DSGE Modeling
1

Helpful people of Dynare,

I had a .mod file that worked, but the steady state of my exogenous variable, z, was 0, which will not work with log-linearization. z was always used in the context of exp(z), so I though this would be a simple fix. In a new .mod file, I changed all instances of exp(z) to A, so the steady state of A is 1. However, the new .mod can no longer find the steady state:

Error using print_info (line 32)
Impossible to find the steady state (the sum of square residuals of the static equations is 6.5834). 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

What is happening? Both .mod files are attached.

Thank you,
Matt

andolfatto_v6.mod (2.8 KB) andolfatto_v7.mod (2.9 KB)

2

Use

A = (1-rho_) * 1 + rho_ * A(-1) + vareps;

instead of

A = rho_ * A(-1) + vareps;

The latter has steady state 0

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