Help: numerical initial values incompatible with the

Dynare help (legacy posts)
1

Please help. “numerical initial values incompatible with the following equations”! In these equations I define marginal utility of nonhousing consumption and housing consumption of the young and the old, respectively. My model is a two-period OLG model. I could not find problems in these equations. Please help. mod file is attached.

dynare mymodel

Configuring Dynare …
[mex] Generalized QZ.
[mex] Sylvester equation solution.
[mex] Kronecker products.
[mex] Sparse kronecker products.
[mex] Local state space iteration (second order).
[mex] Bytecode evaluation.
[mex] k-order perturbation solver.
[mex] k-order solution simulation.
[mex] Quasi Monte-Carlo sequence (Sobol).

Starting Dynare (version 4.3.0).
Starting preprocessing of the model file …
Substitution of endo lags >= 2: added 1 auxiliary variables and equations.
Found 37 equation(s).
Evaluating expressions…done
Computing static model derivatives:

  • order 1
    Computing dynamic model derivatives:
  • order 1
  • order 2
    Processing outputs …done
    Preprocessing completed.
    Starting MATLAB/Octave computing.

STEADY: numerical initial values incompatible with the following equations
3 4 5 6 7 8

Please check for example
i) if all parameters occurring in these equations are defined
ii) that no division by an endogenous variable initialized to 0 occurs
mymodel.mod (2.7 KB)

2

You did not define an initval-block. Hence, all variables are initialized to 0. This leads to the error message.

3

Thank you, jpfeifer.
Yes, I intentionally did not define initval-end block because I have no idea how to provide initial values for thoes endogeneous variable. It is a two-sector model with OLG agents with growth, and I have not yet figure out how to compute a steady state. I saw some mod files that can run successfully without specifying an initval-end block. Hence I followed and did so but, you know, failed.
Any further suggestion? Thanks a lot.

4

But as the error message says: you cannot initialize something to zero, if you divide by it. E.g. if you have CRRA utility, marginal utility is 1/c^sigma. If you initialize c to 0 it results in a division by 0. Just set it to something else.

5

Thanks, jpfeifer. I will try that.