Dear professor, I am completely new with Dynare. I am working on this two agents macro model with energy sector and i need to see the effect of a TFP shock. I first computed manually the steady state (by pen), obtaining everything as a function of capital, since I cannot go further. So I put it on …

Check your specification. A_e=rhoa*A_e(-1)+eps_a; implies A_e is zero in steady state, which conflicts with other equations.

Thank you very much for your reply. However i don’t know how to change the specification for A_e; Could you please give a suggestion on how to change it? I also tried to run the model withouth the A_e, so without TFP and TFP shock, just to see if like this it finds the steady state, but it does not…

See [image] Error in GK Model Steady state An obvious issue is that you either need to define the exogenous process in terms of log productivity or use exp(A) in the production function. Otherwise, the steady state for A is 0 and therefore also for output.

Thank you very much. I understood the problem and fixed it. But still it cannot find the steady state. Now it gives me non-zero residuals only for equation 2. Does it mean that the mistake is there? Do you have other ideas of what else could be wrong? Thank you a lot

Please provide the updated file.

TANK2cdt.log (1.3 KB) Here it is! Thank you a lot

That’s the log-file, not the mod-file.

TANK2cdt.mod (3.2 KB) I am sorry here it is

Why are you allowed to set K_ss = 0.003;?

try_exp.mod (2.4 KB) It was a guess. I also realised maybe was there the problem. So i computed a steady state of a semplified version of the model, to have a better guess for capital. Now the code works. Could you please chack if now do you think enerything is ok in the model? Thank you a lot agai…

Impossible to find steady state in two agent model

Steady state

jpfeifer 15 May 2023 19:16 4

See