Endogenous discount factor. Mendoza 91

Hi, I’m trying to replicate Mendoza’s 91 model using the first order conditions of Schmitt-Grohé and Uribe 2002, but when I run the model I get

??? Error using ==> print_info at 52
Impossible to find the steady state. Either the model doesn’t have a unique steady state of the guess values
are too far from the solution

Error in ==> stoch_simul at 46
print_info(info, options_.noprint);

Error in ==> hansen1 at 148
info = stoch_simul(var_list_);

Error in ==> dynare at 132
evalin(‘base’,fname) ;

Could someone help me? It’s urgent. What’s wrong?

hansen.mod (1.22 KB)

The initial values that you are providing are far from solving the nonlinear static model. Errors are specially large on the 2nd and 3rd equation. Maybe you made a typo writing the model in the *.mod file or deriving by hand the steady state.

Also, please look at the User Guide to understand the timing convention used in Dynare