Problem with Ramsey SS with solver

Optimal Policy
1

Dear all,

I have an issue with the computation of the Ramsey SS. I created an external SS file for my Ramsey model, since, in order to solve this SS, I exploit the matlab fsolve command.

The SS file works correcly, but when I use it in the Ramsey mode, I get the following error:

Ramsey: The steady state file computation for the Ramsey problem resulted in NaNs at the initial values of the instruments

If I run the diagnostic, what I obtain is:

evaluate_steady_state: The steady state file computation for the Ramsey problem resulted in NaNs.
evaluate_steady_state: The steady state was computed conditional on the following initial instrument values:
v 0.000000
evaluate_steady_state: The problem occured in the following equations:
Equation(s): 20, 22,
evaluate_steady_state: If those initial values are not admissable, change them using an initval-block.
MODEL_DIAGNOSTICS: The steady state cannot be computed
MODEL_DIAGNOSTICS: Steady state contains NaNs

This message puzzles me a bit, since I am not able to understand if the problem is in my coding procedure (i.e. the way I code the SS file) or if the problem is related to the Ramsey problem itself.

Thank you very much for the help, have a nice day!

mod_forum.mod (3.9 KB)
mod_forum_steadystate.m (3.5 KB)
root4_copy.m (2.0 KB)

2

Is the problem still current after Problem with maximum number of iterations?

3

Dear Prof,
yes, the problem is still current, since this is another version of the model, where I was particularly interested in deriving the SS as descripted in the previous post.

Thank again for the help,
Have a nice afternoon

4

This is very tricky case. Some of it has to do with not correctly dealing with the Ramsey conditioning. But even after fixing this, there is still a design issue in Dynare left:
mod_forum.mod (3.9 KB)
mod_forum_steadystate.m (3.8 KB)
root4_copy.m (2.0 KB)

For it to work, you need the fix at

5

Dear Professor, thank you very much.

Is this a patch I should download? Sorry but I do not understand how to deal with this.

Thank you again for the help!
Have a nice day

6

You can use the most recent snapshot of Dynare at Download | Dynare, which contains the fix.