Hi,

I’m trying to replicate Bianca De Paoli’s model of small open economy, but disregarding the optimal monetary policy part. Instead, I include a Taylor rule to close the model. I wrote the model as exponential of variables defined in log. For some reasons, Dynare has problem in computing a steady state.

Could anyone be so kind as to take a look at the file and see where I got it wrong?

Thanks a lot in advance,

M.

bdp_cm_jp_nl.mod (3.37 KB)