Problem with steady state in SOE model

Dynare help (legacy posts)
1

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)

2

You should first make sure your model runs without the exp(). Then do the substitution. Currently, you did not fully do it. For example, in equation 5 you have

As p_h and p are in exp in some equations this one is wrong.