Impossible to find the steady state:Cicco, Pancrazi, and Uribe (2010)

Steady state
1

Hi all,

I am new learner of dynare and I was trying to simply simulate Garcia-
Cicco, Pancrazi, and Uribe (2010) only for financial frictions
rbc_ff.mod (3.0 KB)

But the result says : Impossible to find the steady state. All initial values were calculated from steady state of the model.

Can any one explain what is the core of the problem?

Thank you

2

You can cross-check with DSGE_mod/GarciaCicco_et_al_2010.mod at master · JohannesPfeifer/DSGE_mod · GitHub

3

thank you for quick reply. But I have checked with this source before creating this post.

All I changed was putting exp() for variables and compute initial values using equations in steady state model part.

I was wondering if it is correct after using exp () for some of equations in your source :

1.log(tb)= (d) -(d(+1))(g)/(r) ----> (tb)= exp(d) - exp(d(+1))exp(g)/(exp(r));
2.log(g/gbar)=rho_glog(g(-1)/gbar)+eps_g; ---->(g) = (1-rho_g)(gbar)+g(-1)*rho_g+ e_g;
3.log(tb_y) = log(tb)/y;---->(tb_y) = (tb)/exp(y);
4.g_y= y/y(-1)*g(-1);---->(g_y) =(y)-y(-1)+(g(-1));

4

Don’t do a full exp()-substitution. Append auxiliary variables. See Question about understanding irfs in dynare