Dear masters of Dynare,

I am currently estimating small RBC model. I have log-linearized the model equations. Due to the structure of the model the steady-state values of endogenous variables (especially the employment rate) cannot be analytically solved for. Since these steady-state values show up in the log-linear equation this is a problem. I tried to solve this problem by using external function that solves for steady state value of employment using fsolve inside the model section. This way the steady-state values should be in accordance with current values of structural parameters. Unfortunately I am getting following error:

Configuring Dynare …

[mex] Generalized QZ.

[mex] Sylvester equation solution.

[mex] Kronecker products.

[mex] Sparse kronecker products.

[mex] Bytecode evaluation.

[mex] k-order perturbation solver.

[mex] k-order solution simulation.

Starting Dynare (version 4.2.0).

Starting preprocessing of the model file …

Found 14 equation(s).

Evaluating expressions…done

Computing static model derivatives:

- order 1

Computing dynamic model derivatives: - order 1

This application has requested the Runtime to terminate it in an unusual way.

Please contact the application’s support team for more information.

??? Error using ==> dynare at 126

DYNARE: preprocessing failed

Windows XP, Matlab R2010a, Dynare 4.2.0

labour_friction.mod (5.43 KB)

solve_n_ss.m (258 Bytes)

employ.m (2.26 KB)