I am attempting to run the single sector small open economy model of Schmitt-Grohe and Uribe (2003) with the habit persistence in consumption and labour in Khorunzhina (2015). The difficulty is that utility depends on all past consumption and all past labour supply. I have simplified by considering only the previous 100 periods so I am dealing with a finite sum in the FOCs.
I am having alot of trouble calculating the steady state. Is the specification I have used for the steady state correct (particularly the use of the for loop)?
Am I likely to run into further problems because of the size of the FOC’s?
Thanks in advance for your help.
SGU_2003.mod (4.8 KB)