Conditional steady state

Optimal Policy
1

Hi everybody,

I am struggling with the notion of “conditional steady state” needed in the ramsey policy set up.

What a steady state conditional on the value of the instrument would differ on wrt a usual steady state?
I cannot grasp the underlying intuition and as a consequence I am not able to implement it in my e-dsge with financial frictions everytime I change the policy instument (I am not able to change the steady state consequently).
Here you find attacched my code where I am failing to find out the optimal tax on brown assets of a bank.
ramsey_prud.mod (8.9 KB)
ramsey_prud_steadystate.m (2.9 KB)
findssramsey_prud.m (1.8 KB)

2

Have a look at

I reads in the value of the instrument and then computes the steady state values for whatever the value of the instrument is.