I am trying to simulate a standard new Keynesian model. The model is from Eggertsson 2006 The mistake of 1937: A General Equilibrium Analysis. I changed the pricing setting a little bit because I don’t really know how to write the code for the setting in his paper. I got the following error message

STEADY: numerical initial values incompatible with the following equations

1 2 3 5

Please check for example

i) if all parameters occurring in these equations are defined

ii) that no division by an endogenous variable initialized to 0 occurs

I think I’ve defined all the parameters.

Another question is, is it ok just to put “check” instead of entering all the initial values? I am not sure if I could find all the steady state values by hand.

Could someone help me? Thanks!

Eggertsson 2006.mod (2.32 KB)