Need help------con't find steady statest

Dear Ladies and Gentlemen,

I am Kedou, a fresher of Dynare. To finish my PhD Thesis, I need to built a OLG model. My first step is to built Gertler(1999) in Dynare for it’s a basis of my model. However, I couldn’t solve a steady state. I really need your help and thanks a lot!!! Below is my code:

// Endogenous variables: consumption(C); capital(K); ratio of wealth(lamba); marginal propensity to consume(mpc);

// retiree parameter to mpc(old); human wealth(H); wage(W); rent(R); output(Y); technology level(X); number of workers(N);

// wights of gross return of R(Om)

var Y R W K lamba X N mpc old C H Om;

// Parameters declaration and calibration:factor share in C-D function(alph); discount rate(bet)

// tech growth(x); population growth(n); depreciation rate(aa); survive rate(gam); remain work(delt)

parameters alph bet x n aa gam delt seita;









// Equilibrium conditions


// 1→3.6 (capital accumulation)

K = Y-C+(1-aa)*K(-1);

// 2→2.18 (movement of lamba)

lamba = delt*(1-mpc*old)*lamba(-1)*R*K/K(+1)+(1-delt);

// 3→2.12 (mpc)

mpc = 1-bet^seita*(R(+1)*Om(+1))^(seita-1)*mpc/mpc(+1);

// 4→2.7 (mpc*old)

mpc*old = 1-bet^seita*gam*R(+1)^(seita-1)*mpc*old/(mpc(1)*old(1));

// IF omit Equ1.10 here as Oum=delt when elasticity→1

// 5→2.16 (human resource)

H = N*W+H(+1)/((1+n)*R*Om(+1)/delt);

// 6→2.17 (consumption)

C = mpc*((1+(old-1)*lamba)*R*K+H);

// 7→3.3 (wage)

W = alph*Y/N;

// 8→3.4 (rent)

R = (1-alph)*Y/K+(1-aa);

// 9→2.1 (movement of population)

N = (1+n)*N(-1);

// 10→3.2 (movement of tech)

X = (1+x)*X(-1);

// 11→3.1 (output)

Y = (X*N)^alph*K^(1-alph);

// 12→2.10 (Om)

Om = delt+(1-delt)*old;


// Steady state (analytically solved)


lamba = 0.16;

K = 1;

N = 1;

X = 1;


// Check that this is indeed the steady state


You should provide initial values for all variables. Also,

X = (1+x)*X(-1);

implies that no steady state exists for your model. You need to detrend your model.

1 Like

Dear leader,
Thank you very much for your help. I have fixed my problem!

Dear Kedou

Since I’m working with a quite similar model right now, so Is it possible to share the Dynare code for the Gertler model?

It would be very helpful. Thanks in advance.