Impossible to find the steady state

Dynare help (legacy posts)
1

Hello,

I’m trying to run a DSGE model, but 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 Modelo_DSGE (line 411)
steady;

Error in dynare (line 180)
evalin(‘base’,fname) ;

I cannot find where my error is, can someone help me please?

Thank you very much.

I attatched .mod file.
Modelo_DSGE.mod (5.7 KB)

1 Like
2

Hard to tell. But it seems you are computing an analytical steady state, which does not solve the model equations. I would recommend checking the model equations that show residuals for correctness.

3

jpfeifer, thank you very much for your response. Sorry to bother you again, but Im not sure if I completely understand you:

  • What do you mean the analytical steady state doesnt solve the model? According to the professor Im working with, this model shoud have an analytical steady state solution. If the analytical steady state doesnt solve the model, what do you suggest?

  • I already checked the model equations that show residuals not equal to zero, but those are equations that Im not taking into account in the steady state calculation. What I mean is that Im guessing X variables initial values, so there are X different equations that I dont need to solve, hence its residuals should be different to zero. I am right?

Really appreciate your help.

4

I am not entirely understanding your approach. Are you providing analytical steady state values? Or are you providing starting values based on algebraical relationships without fully solving the model. I thought you were doing the former. In this case, as your computations do not solve the entered model equations, either your computations or the model equations are still wrong.
In case you are doing the latter, I would recommend trying to compute the full steady state analytically. While Dynare in principle is capable of numerically computing steady states, there are often user errors in the equations that prevent this. Properly debugging often requires computing the steady state analytically.

5

Professor Pfeifer, I was initially trying to find the steady state of the model giving some initial values. In recent days I tried to derive the analytic solution of the steady state without any success, so now I return to my initial strategy. Im trying to find the reason why Matlab is not able to derive the steady state of the model, do you believe that the error occurs in the equations I derived at the steady state section, or it is also possible that the equations that define the model are wrong?

Once again, thank you very much for your help.