How to find unit root with Dynare?

I have a RBC model with habit formation. I have computed by hands all steady state values of variables. When I try different values of calibrated parameters of habit persistence, sometimes I got the reply from Dynare that steady state can not be found.

I have read this post:
http://www.dynare.org/documentation-and-support/faq/solutions-simulations
and I think my problem is about unit roots.

I want to identify the values of parameters at which I can not find steady state.
Should I compute Blanchard and Kahn conditions by hands to find the conditions for parameters?
Or I can find some solution with Dynare?

Thank you all for your help. I am new to the forum so please forgive me for any mistake :slight_smile:

If Dynare complains about the steady state, it means that you did not provide the analytical steady state to Dynare… Or provided a wrong steady state. Did you provide the steady state to Dynare? If you are able to obtain a closed form solution for the steady state you should provide it to Dynare with the steady_state_model block… If you have this closed form solution you should also be able to see for which parameter configuration you have a unit root.

Looking at Blanchard and Kahn conditions would not help, since you need the steady state to compute the eigenvalues of the linearised model…

Best,
Stéphane.

1 Like