Hello,

I’m trying to run a simple Iacoviello (2005) model with borrowers and savers and a collateral constraint with housing. Every time I run the model I get the following error message:

Error using print_info (line 74)

Impossible to find the steady state. Either the model doesn’t have a steady state,

there are an infinity of steady states, or the guess values are too far from the

solution

Error in steady (line 92)

print_info(info,options_.noprint, options_);

Error in Iaco (line 217)

steady;

Error in dynare (line 180)

evalin(‘base’,fname) ;

I know this is a very common problem for dynare rookies but I cannot find where my error is. I have tried the model diagnostics command but this returns the following message:

SOLVE: maxit has been reached

model diagnostic can’t obtain the steady state

I am certain that there is a mistake in my model, is there a way of identifying where it is?

Any additional help would be much appreciated.

Thanks

Iaco.mod (1.86 KB)