Help with model doesn't have steady state problem?

Dear Sir,

I have been working on a model using Dynare, and I have a following problem. I get the error

Error using print_info (line 32)
Impossible to find the steady state (the sum of square residuals of the static equations is 0.0524). 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 model2.driver (line 334)
steady;

Error in dynare (line 293)
evalin(‘base’,[fname ‘.driver’]) ;

I have searched a lot around this forum, and it seemed many people have similar problem. I used an external file to use fsolve to solve for initial values using myfun2.m (945 Bytes) this file, saved it as vector “x” and used it in the main mod file model2.mod (2.4 KB)

With the error, I get the following residual numbers:

Residuals of the static equations:

Equation number 1 : 0 : Lambda
Equation number 2 : 6.0972e-07 : M
Equation number 3 : -0.00017027 : p
Equation number 4 : -0.020978 : 4
Equation number 5 : 0.026618 : 5
Equation number 6 : -0.14011 : 6
Equation number 7 : -0.00012987 : 7
Equation number 8 : -0.068687 : y_r
Equation number 9 : -0.068688 : y_lr
Equation number 10 : -0.068688 : y
Equation number 11 : 0 : z_r
Equation number 12 : 0 : z_lr
Equation number 13 : -0.068688 : pi
Equation number 14 : -0.069114 : d
Equation number 15 : -0.00019227 : D
Equation number 16 : -0.011976 : 16
Equation number 17 : -0.0033808 : 17
Equation number 18 : 0.063189 : 18
Equation number 19 : 3.9762e-06 : 19
Equation number 20 : 0.06208 : 20

They all seem pretty close to zero except maybe for equation 6. I have check equations many times, but I really don’t see any problem with them. Any suggestion as to how to proceed from here to solve the model? Thank you so much for your help.

Jeremy

  1. Does your model have a unit root? If so, then endogenously solving for a steady state will not work and you will need to provide an analytical one, i.e. you need to select one steady state out of the infinitely many possibilities.
  2. You did not upload all files necessary to run the mod-file