Problem with Initial values

Hi. I’m trying to replicate a basic model with price rigidities a-la Calvo. Attached is the .mod file. When I run this one, the error that Dynare shows me is this:

??? Error using ==> lnsrch1 at 53
Some element of Newton direction isn’t finite. Jacobian maybe singular or there is a
problem with initial values

Error in ==> solve1 at 127
[x,f,fvec,check]=lnsrch1(xold,fold,g,p,stpmax,func,j1,j2,varargin{:});

Error in ==> dynare_solve at 124
[x,info]=solve1(func,x,j1(r(i):r(i+1)-1),j2(r(i):r(i+1)-1),jacobian_flag,
bad_cond_flag, varargin{:});

Error in ==> steady_ at 120
[oo_.steady_state,check] = dynare_solve([M_.fname ‘_static’],…

Error in ==> steady at 54
steady_;

Error in ==> parametros at 162
steady;

Error in ==> dynare at 132
evalin(‘base’,fname) ;

Error in ==> Dynare1 at 11
dynare Parametros.mod

What could be the problem?
Thanks for your attention
Parametros.mod (1.45 KB)

The initial values are typically 0 in a linear model. Hence, I commented the initval part out. Moreover, the timing for K is wrong, so the BK-conditions failed. I guess K is capital, which is a predetermined variable (see the manual). The solution is to use

predetermined_variables K;

The running mod-file is attached.
Parametros.mod (1.5 KB)

Hi. I’m running a model and I’m getting exactly the same results as Nrodriguez. The difference is that my model is not linearized (and this is a deterministic model, not stochastic), so I don’t know what the problem can be. Can anybody help me please?

This is my “.mod” file.

Thank you.
Modelo5.mod (1.82 KB)

Try to derive the steady state by hand. It will either tell you if there is a problem with your model or give the right values.
Whenever possible it is always better to work with an analytical steady state.

Best

Michel