Hi everyone,
I’m trying to solve Tesar and Stockman’s - Taste and Technology in a two-country model of the business cycle.
TS.mod (3.4 KB)
When I try finding the steady-state, model diagnostic gives me MODEL_DIAGNOSTICS: The steady state cannot be computed.
I’ve set a block of initval to try to achieve some sort of lower residuals, but I do not know how to find appropriate initial values for the model so that it could compute and find a steady state.
Here are my residual values and following messages :
Equation number 1 : -3.0669 : 1
Equation number 2 : -3.0669 : 2
Equation number 3 : -2.0929 : 3
Equation number 4 : -2.0929 : 4
Equation number 5 : 0.063141 : lambt
Equation number 6 : 0.063141 : lambts
Equation number 7 : 0.063148 : 7
Equation number 8 : 0.063148 : 8
Equation number 9 : 0.12858 : lambnt
Equation number 10 : 0.1286 : lambnts
Equation number 11 : -0.30407 : 11
Equation number 12 : -0.50138 : 12
Equation number 13 : -0.30408 : 13
Equation number 14 : -0.50139 : 14
Equation number 15 : 0.39579 : 15
Equation number 16 : 0.82319 : 16
Equation number 17 : 0.39579 : 17
Equation number 18 : 0.82319 : 18
Equation number 19 : 0 : 19
Equation number 20 : 0 : 20
Equation number 21 : 0 : 21
Equation number 22 : 0 : 22
Equation number 23 : 1.0002 : l
Equation number 24 : 1.0001 : ls
Residuals of the static equations:
Equation number 1 : 0.0021716 : 1
Equation number 2 : 0.00064302 : 2
Equation number 3 : 2.519e-05 : 3
Equation number 4 : 0.00095038 : 4
Equation number 5 : -0.0016239 : lambt
Equation number 6 : -0.0027729 : lambts
Equation number 7 : -0.0013872 : 7
Equation number 8 : -0.002409 : 8
Equation number 9 : -0.0028084 : lambnt
Equation number 10 : -0.0049678 : lambnts
Equation number 11 : -0.002599 : 11
Equation number 12 : -0.0022006 : 12
Equation number 13 : -0.00044551 : 13
Equation number 14 : -0.00030665 : 14
Equation number 15 : 0.0017008 : 15
Equation number 16 : 0.001677 : 16
Equation number 17 : -0.00027211 : 17
Equation number 18 : -0.00179 : 18
Equation number 19 : 0 : 19
Equation number 20 : 0 : 20
Equation number 21 : 0 : 21
Equation number 22 : 0 : 22
Equation number 23 : -0.00018206 : l
Equation number 24 : 0.00011008 : ls
Error using print_info
Impossible to find the steady state (the sum of
square residuals of the static equations is
0.0001). 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
Error in steady (line 102)
print_info(info,options_.noprint, options_);
Error in TS.driver (line 403)
steady;
Error in dynare (line 278)
evalin(‘base’,[fname ‘.driver’]);
I appreciate every bit of help.
Cheers and thank you in advance.