Impossible to find steady states

Steady state
1

Hello professor, I’m getting the error message “impossible to find steady state”.

No matter how i adjust the initvals, the model can’t seem to solve the steady states. What am i doing wrong?

Tmain.mod (2.2 KB)

2

See

3

Many thanks Prof. I’ve read from the page you directed me to but still not really getting it.

Can you please set an example of an equation that contains the exp () A or better still insert one with comment in my mod file to guide me through?

Thank you

4

For example, you have A being mean zero

A = rho_a*A(-1) + mu_a;

That conflicts with

Y = A*(K^alpha)*(N^vartheta)*(EN^(1-alpha-vartheta));

where output would then be 0.

5

Thank you prof but how do you suggest I correct the equation to avoid the zero mean.
I’m asking because the equation is from literature except I chose to use non linear forms.

6

Either you use Y=exp(A)*K^alpha.... or you need the exogenous process as log(A)=rho*log(A(-1))+epsilon.