Error "lnsrch1 at 53", Newton direction


This error message appears when i compute my code:
“??? Error using ==> lnsrch1 at 53
Some element of Newton direction isn’t finite.”

What does is it mean?
I changed a lot of initial values and parameters values, it isn’t better.
I am almost sure the equations of the model are the right ones, and expressed in the right form.

Many thanks

test1605.mod (2.74 KB)

Your starting values are so poor that Dynare cannot find the steady state. Try computing the steady state by pencil and paper and provide them to the program.

Thank you for your answer, i’m going to find the steady state values by pencil and paper.


excuse me for my evident question , but what do you mean by computing steady state by pencil and paper ? is it not considering the rime subscript and putting the schock=0?
thank you for the answer.

It means dropping time subscripts and setting shocks to 0 and then computing the steady state by hand on a piece of paper.