I have starting learning to use Dynare. Implementing models from scratch, I have come across with the error “The steady state contains NaN or Inf”, and then a summary of the equations and which one of them contains the problem. I have looking for questions with the same problem, and found some solutions, even though as I haven’t completely understand why this error in general is caused for.
The concrete question is that, what in the mathematical implementation causes the preprocessor not to run properly in this cases. I have thought about initial conditions that contains illegal divisions or mathematical indeterminacies. I just want to make sure if the problem is with the stability of the system, or the initial guesses for variables (initval), or both.