Hi Guys,
I was wondering why the different solution options in the steady command will give very different results or none at all.
For example
I used a very simple one sector RBC model with comsumption/leisure choice.
I can solve for the deterministic steady state by hand and entered these values between the initval and end commands.
When I used the Sims solver it produced the correct steady state values.
When I used any of the other options I get either
SOLVE: Iteration 43
Spurious convergence.
or
??? Error using ==> steady_
STEADY: convergence problems
Why is this the case?
I am using the latest version of Dynare 3 and Matlab 7.
regards,
Maurice