Numerous steady states?

Good afternoon everyone,

I am currently writing a dynare code for a modified model of Aoki Benigno (2015). The problem consists in the following: my matlab file solves my system iteratively and the solution is sensitive to the change of initial values (a change in x0 leads to matlab printing out a different steady state), dynare continues to output

“Impossible to find the steady state. Either the model doesn’t have a steady state, there are an infinity of steady states, or the guess values are too far from the solution”.

So I guess that there infinitely many steady states. Is there a technique to handle this? Can linearizing with exp() help? Or maybe I should change options of steady command? Or the only solution is to change my model?

Thank you in advance for your precious help. Both codes attached.
Anna Khoruzhenko
mm.m (3.13 KB)
test_work_fsolve.m (4.06 KB)
model_sep2.mod (8.57 KB)

You have two variables

that do not appear in the model.