Hi,

I am trying to use Dynare only to get some good initial conditions for a global method solution.

I am solving a two country model and I have the problem of the indeterminacy of the portfolio in ss.

I am trying to feed Dynare a steady state around which I would like a second order approximation (I am choosing one of the possible portfolios). However it complains and I get this

Error using lnsrch1 (line 53)

Some element of Newton direction isn’t finite. Jacobian maybe singular or there is a

problem with initial values

Error in solve1 (line 129)

[x,f,fvec,check]=lnsrch1(xold,fold,g,p,stpmax,func,j1,j2,varargin{:});

Error in dynare_solve (line 130)

[x,info]=solve1(func,x,j1(r(i):r(i+1)-1),j2(r(i):r(i+1)-1),jacobian_flag,

bad_cond_flag, varargin{:});

Error in evaluate_steady_state (line 66)

[ys,check] = dynare_solve([M.fname ‘_static’],…

Error in steady_ (line 54)

[steady_state,params,info] =

evaluate_steady_state(oo_.steady_state,M_,options_,oo_,~options_.steadystate.nocheck);

Error in steady (line 81)

[steady_state,M_.params,info] = steady_(M_,options_,oo_);

Error in cfg_2nd_order_simple (line 231)

steady;

Error in dynare (line 120)

evalin(‘base’,fname) ;

how can I solve this problem? I attach my super simple codes

thanks

elisa

cfg_2nd_order_simple_steadysyate.m (2.63 KB)

cfg_2nd_order_simple.mod (2.5 KB)