Problem with steady state in Iacoviello and Neri (2010)

Dynare help (legacy posts)
1

I am trying to simulate a model with housing as a collateral constraint including both a consumption and a construction sector which is a simplification of Iacoviello and Neri (2010) . I get the error that ‘it is impossible to find a steady state’. I checked the model several times and I cannot find the mistake.

I attached the mod file below. Any help will be very much appreciated.
iaccons.mod (3 KB)

2

Increasing maxit
leads to

[quote]STEADY-STATE RESULTS:

cu -1.70124
cc -5.2334
hu -0.669188
hc -2.22541
wcu -0.298943
wcc -1.25433
lcu -0.22745
lcc -0.209362
whu 0.798813
whc -1810.75
lhu -2.20501
lhc 1.22191
bu 1.61215
bc 1.61215
lam 1.60937
r -0.0375194
dp -0.0320662
q -0.315767
yc -0.026082
yh -0.638619
x 0.13393
g 0[/quote]

whc does not look correct. Check the equations involving it.

3

Thank you for you help but unfortunately I could not find any mistake in the equations containing whc.