Dynare3.cc:178 in Tille & Van Wincoop paper on international capital flows


I am trying to replicate Tille & Van Wincoop’s paper “International Capital Flows” in Dynare++ at order 3. I am using their exact same parameter values and same model structure.

However, I am getting dynare3.cc:178 error. Any clue?

Attaching my mod file

With regards,

TilleOriginal.mod (2.5 KB)

That is the message that the steady state could not be found. Is there a reason for not using Dynare?

I am facing the same issue with Dynare also. The portfolio allocations are solved at 3rd order approximation. But somehow I am getting the msg about steady state not found.

I saw another thread Models with portfolio choice where it is said that Dynare cannot solve the model.

Any clue will be really appreciated.

For tau=0, the steady state will be found. My understanding is that the steady state in these models is fundamentally indeterminate and you cannot compute it endogenously. Thus, just providing starting values instead of exact steady states will not work.

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Thank you for the explanation.