The model is about macroeconomic influence of pension system,

However my code is too sensitive to initial values (initval block)

How can I resolve this problem?

hur6.mod (2.7 KB)

What do you mean with

?

Hello, professor Pfeifer,

There are 2 endogenous variables and 2 exogenous variables which I should guess the initial value for initval block.(Please refer my code: hur6.mod)

( A(Total Factor Productivity), n(entering population on first period), K(capital stock), ay(amount of risky asset which belongs to younger generations) )

As the initial guess of these 4 variables is fixed, initial values of the rest of the variables are determined by equations of the model block.

But my initial guess of the 4 variables are not meaningful because It is just a number I arbitrarily set.(I donâ€™t have any sense of the variables and size or unit, Is this normal?)

Thus, when I change the initial values of the 4 variables in initval block, the results(steady-state) and IRFs are not stable at all.

How can I get the meaningful result and analysis?

Thank you in advance.

You seem to be suggesting that your steady state is not unique. In that case, you need to provide an analytical steady state in order to select the one you want.