Hi, I would like to add endogenous capital accumulation into Mr. Pfeifer’s Gali Chapter 3 Nonlinear model in small open economy.
Although the model could run, but I think my equilibrium condition is wrong, because I‘m confused about how to define C*,Y*, and the relationship between C* and Y*.
There must be some problem in the code/ equilibrium equations, but I wasted days without spotting any. Can someone help me spotting the problem? [SOE_derivation.pdf|attachment]
Thank you so much in advance!