Hi,

I am currently working on simulating the transition path from one steady state to another in my model. The policy shock occurs in the first period. I have a separate file (`solvess_model.m`

attached) that I use to solve the steady state. When the policy shock is small, Dynare successfully computes the steady state. However, when the policy shock is larger, Dynare issues the following warning: “The steadystate file did not compute the steady state.”

I am unsure of the reason for this issue. I would greatly appreciate any insights or suggestions you might have to help resolve this problem.

Thank you very much in advance for your assistance.

main_tax1.mod (3.7 KB)

solvess_model.m (1.9 KB)

solve_ss.m (2.1 KB)