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)
Error in dynare_solve (line 130)
Error in evaluate_steady_state (line 66)
[ys,check] = dynare_solve([M.fname ‘_static’],…
Error in steady_ (line 54)
Error in steady (line 81)
[steady_state,M_.params,info] = steady_(M_,options_,oo_);
Error in cfg_2nd_order_simple (line 231)
Error in dynare (line 120)
how can I solve this problem? I attach my super simple codes