Hello,

I am running a model with large deterministic shocks and relying on the homotopy method in Dynare. Most of the time the method arrives at a solution, but in a few cases the method does not find a solution, even though lambda is very close to 1 (greater than 0.99). From what I understand this means that the solution shown is only marginally far from the “true” solution. Am I correct?

Thank you for your time and your extraordinary work to make modelers’ lives easier.