How to make the SS equal to 0?

Steady state
1

Hi dear, i make some post about these code, because I’m literally going crazy.
The problem is relative to the SS, I thought I introduced the steady state correctly by referring to the paper, but that’s not the case, can anyone tell me why? many thanks in advance.

Appendix_Papier0.pdf (1.3 MB)
simulazione2_e.mod (2.5 KB)

1 Like
2

You declare your model to be (log)-linear but there clearly are some equations that are not linear such as eq. 6 and 10. Basically all equations where dynare gives you NaN’s in the residuals. If the model is correctly log-linearized, all endogenous variables have zero steady state.

3

There should not be a rkss in the marginal cost equation. As @DoubleBass wrote, check your linearization. Removing the constant yields a 0 steady state:
simulazione2_e.mod (2.5 KB)

4

Dear professor, thank you very much for your precious help, I would like to ask you what the predetermined_variables k function is for. Furthermore, I noticed that the impulse responses come out a little different compared to the original paper, can you tell me why?
Thank you again for your precious help.

5

Dynare has a stock at the end of period timing convention, while you used a stock at the beginning of period convention for capital. The predetermined_variables command tells Dynare about this difference in timing.

Regarding replication results, the standard answer is

1 Like
6

Dear Professor it was really precious for all your help, thanks again.