Dear Colleagues

My question is not new. I come up with the Euler Equation. Equation (2) in dynare file where I take the first derivative with respect to N_t (labor).

The equation cannot be wrong because it is quite popular but anytime I put this equation in the model, the steady state differ from zero and I do not know why.

I think it is better for me to learn from this problem rather quit using this equation or something.

Can anyone give me some explanation for this situation? HOW I can know what is the problem and HOW I can solve this?

Here is the file test8.mod (9.9 KB)

Thank you so much

Your steady state computation for N seems to be wrong. All other equations solve, but not this one. This suggests a problem in computation of the steady state.