Gk_macroprudentail

Steady state
1

Dear all

I’ m working on “macroprudential Dsge” model.

I was refferd to the paper “Risk Weighting, Private lending and macroeconomic dynamics”.(Donadelli 2019)

Find attached two files one is the mod file with the model code and the other calculates the steadty state of the dynamic system.

"Impossible to find the steady state (the sum of square residuals of the static equations is 447.7511). 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"

Any help please,

my best.
GK_macro.mod (7.3 KB)
myfun_GK_macro.m (344 Bytes)
GK_macro_steadystate.m (3.2 KB)

2

I cannot run your steady state file due to various issues and syntax problems. Did you upload the correct version?

3

Dear jpfeifer,
thanks for your response,
Find attached the steady state file ,
GK_macro.mod (7.2 KB)
GK_macro_steadystate.m (2.8 KB)

4

I am getting

Unrecognized function or variable 'theta_star'.

Error in GK_macro_steadystate (line 22)
theta=theta_star;
5

Dear Jpfeifer,
thanks for your reply. I remove the parameter theta_star but i have the same issue related to the the steady state. in fact my departure point was the simple GK model when i’ve added the government bonds and capital requirements as a penalty function. (as mentionned in the paper ).
please any help

6

You need to provide a cleaned up version of the file.