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