Error Message in obtaining steady state in Dynare

Steady state
1

I am not able to abtain the sstate for my model. this is the error message i get:

Error using print_info (line 32)
Impossible to find the steady state (the sum of square residuals of the static equations is 14.4437). Either the model
doesn’t have a steady state, there are an infinity of steady states, or the guess values are too far from the solution.

Could someone help

2

Without the mod-file, further diagnostics are impossible.

3

dsge1.mod (1.8 KB)

this is my model

4

Check your model. For example,

              y_t = exp(x)*(k_t)^cf1 *(lab_t)^1-cf1;

is missing brackets for the exponent.

5

Thank you. checked and adjusted the model but still getting the same error message

6

Always provide the most recent version.

7

dsge1.mod (1.8 KB)

here is the updated version

8

From what I can see

                m = m(-1) + e*(t-u)*exp(q);
              i_r = i_r(-1) + (1-u)*exp(q);

implies two unit roots in your model. Thus, there are infinitely many steady states and you cannot let Dynare compute one endogenously. You need to provide one.

9

Thanks…any suggestions as to how to go about that.

10

Either get rid of the unit roots or compute the steady state with pencil and paper.

11

dsge1.mod (1.6 KB) dsge1_steadystate.m (4.0 KB)

Thank you for your time.

I have obtain the steady state analytically and written a steady state file. However, i get an error message of of variables not declare while all variables are indeed declared.

I have also tried providing a steady state model block within the dynare script but it gives me the same error of variables not declared.

I also removed the unit roots but still couldn’t work either

12

Your steady state file does not contain a valid computation. For example

1-ca1/((p_n)*(c_n)= ca1/(e)*(c_t);

is not a proper Matlab assignment. You cannot use implicit definitions.

13

Thank you for your help. I was able to obtain the steady state after rewriting the explicit definitions. I have attached file for you to see if the steady states are correctly computed.

Apart from that I have the following questions:

  1. I want to normalized some variables to one at SS so that i can track the changes. How can i do this on dynare.

  2. I have 3 shocks q,t u. I will only apply shock on q while t and u will take the values of 1 and zero at SS. I know how to apply shock on q but where can i place the t and u such that they will carry the assigned values.

Thanks once again
ds1.mod (2.8 KB)

14
  1. What do you mean with normalize?
  2. You need to specify a shocks- block.
15
  1. I want the value of some key variables e.g y, c, p etc to be equal to one in the prior steady state. This will enable me track the changes once i introduce the shock.

Thank you

16

This requires introducing normalizing constants.

17

Any suggestion or reference on how to go about introducing normalizing constants.

Also from the mod file above, can i take the first SS as the prior SS and the second as the posterior SS.

18

Is that even necessary? Can’t you simply express the Variables as a fraction of the initial steady state?

19

How do you mean specifically?

20

The first entry of the simulated series will be the old steady state. So you can divide all series by this value to obtain ratios.