Dear Prof. Pfeifer and Dynare Community,

I have a model in which some parameters are calibrated such that some endogenous variables in steady state remain at particular value (e.g. I want to normalize steady state labor supply to 1, so I choose labor disutility scaling parameter in HH’s utility function such that L=1 in steady state). In the future I’d like to estimate my model, so (as I understand) for this case I need to specify a separate steady state file, because I need my parameters from above to be updated after each MCMC draw. I tried to implement that but after running dynare I experience the following error:

Warning: Some of the parameters have no value (psig, psis, nu) 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.Error using print_info

The steadystate file did not compute the steady stateError in steady (line 102)

print_info(info,options_.noprint, options_);Error in Model_TwoSector_Tameplate.driver (line 1057)

steady;Error in dynare (line 281)

evalin(‘base’,[fname ‘.driver’]);Error in Main (line 3)

dynare Model_TwoSector_Tameplate.mod

While setting up a separate steady state file I was following NK_baseline.mod and NK_baseline_steadystate.m from Dynare’s installation package. So, it seems like some of my parameters remain unupdated after running steady state file, that is why dynare does not find steady state and reports nonzero residuals for some of my equations while trying to compute it. I feel super confused about this and hope you’ll help me figure it out. Thank you so much!

P.S.: I’m pretty sure that this is not a model’s problem as it runs well when I calculate steady state and all the parameters separately and BEFORE calling dynare. Files of this successful implementation can be found here:

https://drive.google.com/drive/folders/1aafPlG0jRkyOpLaTtsg3Y9v6AYaGPz1x?usp=sharing

Files that cause the problem with steady state file described above can be found here:

https://drive.google.com/drive/folders/1oGd306YpWSF1ncQoJGChPKq2Z9g4JeEU?usp=sharing

In both cases code Main.m is responsible for calling dynare and running my simulations. Thank you very much!