Implementation of Rubio&Carrasco-Gallego Dynare Working Pape

Hi Everybody,

I am new to Dynare and I wanted to implement the simple Rubio&Carrasco-Gallego Dynare Working Paper ( ).

I have written a system based on FOC and equilibrium conditions stated on the paper. I am almost sure my equations and code is correct (or at least same as the equations stated in the paper), however I have been getting unable to find the steady state error that has been the topic of many problems in this forum. I believe the system is too simple for Dynare not to calculate its steady states. So I do not think it is an issue initvalue problem.I suspect perhaps I made some crucial essential mistakes that I cannot realize with my poor knowledge of Dynare programming.

I would highly appreciate any comments and suggestions in order to have a working code. I also believe it will be beneficial for the Dynare community since the paper is referenced as an example paper beginners like me.

Many Thanks,
rubio4.mod (4.43 KB)