Dear all,

Could you please help me with my code? I get the infamous error of Jacobian matrix, but the programme gives me the steady-state.

euler_eq.mod (1.5 KB)

Dear all,

Could you please help me with my code? I get the infamous error of Jacobian matrix, but the programme gives me the steady-state.

euler_eq.mod (1.5 KB)

You have in steady state

```
g -0.182872
```

that does not fit the `g_star`

and results in raising a negative number to the power of a fractional exponent.

Thanks Johannes! By increasing the tax rates, it is possible to derive a positive g in the steady-state. I tried it, and it gives me the same error (keeping g_star in the positive range). Do you think there is a problem with the parameter values or the initial values or the whole model block?

Thanks a lot!

Please provide the updated version.

In equation 4

```
alpha*(-a) * (exp(a*g + b) +a) * (-exp(a*g +b) + a*g +int)^(alpha - 1) = delta * r * alpha *(-a *(exp(a*g(+1)+b)+a)*(-exp(a*g(+1)) + b*g(+1)+ int))^(alpha-1);
```

the part

`(-a *(exp(a*g(+1)+b)+a)*(-exp(a*g(+1)) + b*g(+1)+ int))^(alpha-1)`

has a negative term in brackets with your steady state values.