I have also encountered problems with the steady state. After fixing the mistake in an earlier case (thank you Johannes), I get the error.

Under the unstable version, I get:

Warning: Matrix is singular to working precision.

In trust_region>dogleg at 196

In trust_region at 113

In dynare_solve at 157

In evaluate_steady_state at 194

In resol at 104

In check at 73

In Ch1Modelv9 at 240

In dynare at 185

Error using print_info (line 37)

The generalized Schur (QZ) decomposition failed. For more information, see the documentation for Lapack function

dgges: info=10, n=8. You can also run model_diagnostics to get more information on what may cause this problem.

Error in check (line 76)

print_info(info, 0, options);

Error in Ch1Modelv9 (line 240)

oo_.dr.eigval = check(M_,options_,oo_);

Error in dynare (line 185)

evalin(‘base’,fname) ;

But then under the stable version, I get:

An infinite element was encountered when trying to solve equation(s) 1, 4, 5, 8, 9, 10, 11, 13, 12, 14, 2, 3

with respect to the variable(s): y, inv, v, n, k, w, q_n, q_k, i_k, h_n, y_k, y_n.

The values of the endogenous variables when the problem was encountered were:

y -2.771

c 0.9163

inv -0.381

v -3.368

n -2.019

k 0.8689

sdf -0.01005

w -1215

q_n -2.011

q_k -2.053

i_k -0.121

h_n -0.5668

y_k -0.5998

y_n 0.1805

a 0

z 0

My question is what would be the ideal numbers to use as a steady state value?

Thanks.

Miss Red Riding Hood