Non-zero residuals with solver

Dear All,

I am trying to fully calibrate my model before estimation. I use solver for steady state. Code runs and solves but I get some non-zero residuals and non-zero steady state values which shouldn’t be there due to loglinearization. I checked the non-zero residual equations but I wasn’t able to see the mistakes.

I appreciate for any idea.

Thank you

Code_constant_calibration.m (1.5 KB) Code_constant.mod (5.4 KB)

Why are the variables in exp() if you linearized?

Professor Pfeifer,

I think I used wrong term.

I simply scaled equilibrium system by steady state such as;

\hat{X_t} \equiv \frac{X_t}{X}

Thank you

Then why should the steady state value be 0?

Because I used log deviation from steady state. That is why I used exp() in the equations. For example, I have Css as non zero, but C needs to be zero in the steady state.

You should try to get the nonlinear model to work. There is no point in doing the substitution you do.

Professor Pfeifer,

Thank you for your suggestion.

Professor Pfeifer,

I fixed the equations. Molde runs without any problem now. Apparently I mistakenly used non-linear and linear equations together. I worked on non-linear model and got it work.

Thank you for your help