I have a problem with a model I’m working to. The system is composed by 22 equations. 19 are fine but I have an issue with 3 of them.
Specifically, the issue is that (by following Uribe (2003)) these equations are written in log-deviation (for some (!) of the variables) from the steady state. More in details, here are the 3 equations:
- Government expenditure with spending reversal: ln(g)-gbar=rhogg*(ln(g(-1))-gbar)+rhogd*(d(-1)/y(-1)-dbar/ybar)+eg;
- Tax rate: tau=tauav+theta*(d(-1)/y(-1)-dbar/ybar);
- External debt elastic interest rate: r=rav+psi*(exp(s-sbar)-1);
A ‘bar’ in the variable name indicates the steady-state value of the variable itself.
Clearly, Dynare does not like my way of writing the code but I have no idea how to fix it.