Optimal Ramsey Policy in Nonlinear NK Model

Dear Prof. Pfeifer and Dynare Community,

I’m trying to solve for optimal Ramsey policy for the context of more or less standard NK model with explicit financial sector. However, I experience the following error (please, see attached log-file):

Warning: Some of the parameters have no value (optimal_policy_discount_factor) when using steady. If
these parameters are not initialized in a steadystate file or a steady_state_model-block, Dynare may not
be able to solve the model. Note that simul, perfect_foresight_setup, and perfect_foresight_solver do
*not automatically call the steady state file. *
Warning: Either you have not correctly initialized planner_discount or you are calling a command like
steady or stoch_simul that is not allowed in the context of ramsey_policy

Error using print_info
The steadystate file did not compute the steady state

Error in steady (line 102)

  • print_info(info,options_.noprint, options_);*

Error in Baseline_NK.driver (line 1684)

Error in dynare (line 281)

  • evalin(‘base’,[fname ‘.driver’]);*

I scrolled through a number of threads on these forum, but still remain confused about possible source of my mistake. Btw, if I run the mod-file without Ramsey policy commands, it works just fine, so apparently there’s no problems with the model itself.

I’ll highly appreciate any help or suggestions! Thank you very much!

Corresponding mod- and log- files are at:

You can only use steady and check after planner_objective and ramsey_model. Also, you need to omit the Taylor rule if you want to use the interest rate as an instrument:
Baseline_NK.mod (18.4 KB)

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Thank you very much!