Can anyone help with the execution of this two-sector growth model code? The SS values are correctly given to the model but I consistently obtain a warning that they are not correct.

rbc_informal.mod (2.36 KB)

If you use

before

you will get

[quote]Residuals of the static equations:

Equation number 1 : 0.1168

Equation number 2 : 0.52869

Equation number 3 : -0.22288

Equation number 4 : -0.0028

Equation number 5 : -0.0021699

Equation number 6 : -0.00038533

Equation number 7 : -0.011148

Equation number 8 : -6e-05

Equation number 9 : 0[/quote]

If you are sure your steady state values provided in initval are correct, then the first 8 equations are wrong.

A steady state that is found your equations is

[quote]STEADY-STATE RESULTS:

c 802.235

k 2566.73

n_f 738.677

n_i 79.2343

l 182.092

y_f 1156.61

y_i 147.48

i 205.338

z_f 0[/quote]

Note also that your timing must be wrong. There are no variables dated (+1), indicating your Euler equation is incorrect.