NK model with capital and variable utilisation

Dynare help (legacy posts)
1

Hello all,

I am trying to run a New keynesian model with capital and variable capital utilisation, but I am some issues with the steady state. I have written the code immaculately so I am not sure what I am doing wrong. I have attached the file…The error i am getting is:

Residuals of the static equations:

Equation number 1 : 0
Equation number 2 : 0
Equation number 3 : 0
Equation number 4 : 0
Equation number 5 : 0
Equation number 6 : 1.0001
Equation number 7 : 0
Equation number 8 : 0
Equation number 9 : 0
Equation number 10 : 0
Equation number 11 : 0
Equation number 12 : 0
Equation number 13 : 0
Equation number 14 : 0
Equation number 15 : 0.9799
Equation number 16 : 0
Equation number 17 : -0.9799
Equation number 18 : 0
Equation number 19 : 0
nk4.mod (2.45 KB)

2

Your initial values are wrong. Use:

initval; er=0.000; ez=0.000; i = RHO; rn = RHO; r = RHO; ygap = 0; y = 0; n = 0; pi = 0.00; end;
After that, there still is an issue with the Blanchard-Kahn conditions.

3

Thanks a lot! I fixed the code, made an error with the steady states.