I am new to Dynare and I am trying to solve rbc model with labour supply shock. Yet, it says to me that is impossible to find steady state. May you probably suggest or give me a clue what is wrong. Here is my code:
// rbc model with labour supply shock
var c i n k y theta;
varexo eps;
parameters beta alpha delta rho thetas;
// Calibration and steady state
ks = 944556
ys = 207171
kys = 4.5593;
iys = 0.2576;
alpha = 0.3842;
ns = 0.4614;
cys = 1-iys;
rho = 0.9;
cs = cysys;
is = iysys;
thetas = (1-alpha)*ys / (cs *(ns^2));
// get a value for delta from eq involving depreciation rate
delta = iys / kys;
// knowing delta we can get betta
beta = 1/((alpha/kys)- delta +1);
model;
// 1. (n) Labor market
n = (1 - alpha)y/(nthetac);
// 2. © Consumption Euler equation.
1/c = beta(alphay(+1)/k+1-delta)/c(+1);
// 3. (k) Resource constraint
y = 1(k(-1)^alpha)*(n^(1-alpha));
// 4. (i) Investment
i = k-(1-delta)k(-1);
// 5. (y) GDP
y = c+i;
// 6. (z) labor supply shock
theta = (thetas^(1-rho))( theta(-1)^rho)*exp(eps);
end;
initval;
c = cs;
i = is;
k = ks;
y = ys;
n = ns;
theta = 1;
end;
steady;
check;
shocks;
var eps = 0.01^2;
end;
stoch_simul(order=1,periods=500,loglinear);
// extended_path(periods=500);
pause;
close;
plot(y-log(ys))
pause;
close;
Error using print_info (line 32)
Impossible to find the steady state (the sum of square residuals of the static equations is 42869001355.2616). 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
solutionrbc_practice.mod (1.1 KB)
