How I am trying to code a model for a project. It’s the first model I have coded so not that familiar with Dynare yet. Something is incorrect as it is giving me negative capital and infinitely negative lifetime utility. Any help on figuring out why would be appreciated.

fiscal_paper.mod (1.0 KB)

Your Euler equation in steady state is

```
c_a=beta*c_a*(1-delta+r);
```

Unless `beta*(1-delta+r)=1`

, the only steady state is consumption of 0.

Hi, I adjusted the rate of return so it’s an endogenous variable which will allow the Euler equation to go to one in the steady state. It’s still giving me a strange result as consumption and capital is flat throughout and G doesn’t have the impact it should.fiscal_paper.mod (1.1 KB)