Issue with consumption equivalent

[jpfeifer]

You would need to use the approach at

Questions on Ramsey welfare in Dynare 4.7

The BK violation comes from differences in the computed steady states. They may not be unique. It turns out you cannot have additive parts of the welfare function in the model as they will introduce a singularity. The big number you encounter comes from Dynare replacing the resulting NaN with a large number. 4.7 should have a warning in that case. Now to the workaround. What you can do is have the components of utility as variables in the model: % WelfareC [name='UC'] UC = C^(1-SIGMA)/(1-SIGMA…

With a specific example, I could assist you in porting the code to Dynare 6.