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