Problems concerning about the `nostrict` option

Hello,
I am also getting same error can you please explain how i can fix this?

Does the nostrict-option not work?

It works now. I am working on optimal fiscal policy and i am also facing same error as most of the other scholars have mentioned on dyanre forum related to optimal policy. Error which i am receiving is

Ramsey: The steady state file does not solve the static first order conditions conditional on the
instruments

I am doing every step as you suggested to different people but error is same .Can you please explain me little bit about this how i can fix this problem?

I will be thank full to you.

Search the forum, it has been explained numerous times, e.g. Interpretation of Ramsey Steady State - #4 by jpfeifer
If you have specific questions, please ask them or provide the files for feedback.

Hello,

Can you please help me why i m receiving thsi error

terminate called after throwing an instance of ‘std::filesystem::__cxx11::filesystem_error’
what(): filesystem error: cannot rename [+fiscaloptimal] [YjLu0asVxy]

I am using dynare 4.6.4 version on Matlab R2021b. I downloaded both and setting the path in correct way but i dot know why i am receiving this error again and again.
I am working on Ramsey optima policy is there any specific version i should use to run this policy.

See

But just to be sure, please try the 4.7 beta version at Index of /beta

Thank you so much for your help. I don’t understand where I have to put [~,~]=rmdir([’+’,M_.fname],‘s’); so I only downloaded 4.7-beta2 version and now I am not receiving any error and I am hoping that I will not receive in future. Should I always use this version of Dynare on my laptop?
I also need help in Ramsey optimal fiscal policy. I am using search and matching friction (on-the-job-search) model where in firm’s problem I have two types of output Ygt,Ybt . My model works fine with linearized equation without ramsey policy. I calculated steady states of all my variables so for Ramsey I am using same steady sate values of few variables in nonlinear model.
I have two instruments firing tax, and subsidy of posting a vacancy .I used 0 for both instruments to calculate steady states but it does not work. Do I need to add more equilibrium equations from labor market or this is fine for ramsey?.
Mod file is attach herewith for your consideration.
Ramsey_policy.mod (3.0 KB)

Thanking in anticupation

1, Please stick to 4.7. There should be an official release very soon.
2, A steady_state_model-block requires you to provide steady state values for all variables for all feasible parameter values. It seems you hardcoded some values.

Thank you for your prompt reply. You mean to say that i need to change my parameters values or the steady states values are hardcoded? I am using steady states values of my linear model and i am using them for this nonlinear model. Is this right to proceed like this?

Best

I am saying that you need to change the hardcoded steady state computation. Dynare will provide a parameter vector as an input and given these values, you need to provide the steady state values for the endogenous variables.

Thank you so much for your reply. I solved steady state values numerically of some variables (Un, T,Vgt,Vbt) and used them as parameter and modified the steady state block. Now i am receiving error in my two equations
evaluate_steady_state: The steady state file does not solve the steady state for the Ramsey problem.
evaluate_steady_state: Conditional on the following instrument values:
F 0.000000
chi 0.000000
evaluate_steady_state: the following equations have non-zero residuals:
Equation number 2: 1.169141
Equation number 6: -0.048159

MODEL_DIAGNOSTICS: The steady state cannot be computed
Eq 2 is aggregate output and 6 is govt. spending shock. I dont understand why i am receiving this error. Can you please have a look in my mod file and tell me how i can solve this problem.
ramsey_policy1.mod (2.7 KB)

Best

That still does not look like a proper steady state file. How do you know that for every value of the instrument N=0.88 for example?

Hello,

Thank you for your reply. As I stated above I am working on on-Job-Search labor market by following Krause and Lubik (2006). According to them

“On the job is motivated in a straightforward manner by the presence two types of

jobs, which different in terms of profitability and thus the returns to working. Workers

in low-wage (‘bad’) jobs search in order to gain employment in high-wage (‘good’)

jobs”.

Therefore in my model total unemployment Ut=(Ugt)+(Ubt)=1-Ntg-Ntb=1-Nt

SS value of Ngt Nbt are calculated analytically which are 0.60 and 0.35 respectively. Likewise SS values of Ugt,Ubt are 0.019 and 0.028. by inserting these values in above equation Nt=0.953 and Ut=0.047. Also Ygt=AtNtg and Ybt=AtNtb therefore Ygt and Ybt are also 0.60 and 0.35.

After using these values I calculated SS values of rest of the variables. Please see attached. In my mode there is no capital. I modified the SS equations but ow I am getting this error.

Unable to perform assignment because the indices on the left side are not compatible with the size of the right side.
I will be really thankful if you please help me in this regard?
Please see attached file for your consideration.Ramsey_policy2.mod (2.2 KB)

  1. Why do you think these steady states are invariant to changes in the values for the instruments?
  2. Your model now only has 6 equations plus 2 instruments, but 10 variables. There are two equations missing.

Hello,
Hope you are doing well. Thank you for your reply. I updated my codes and finally i got steady states values for ramsey and als owithout Ramsey as well. But my results are still giving me some error. e.g,there is only one IRF G to Govet.spending shock. Also in results there ae some values which shows NAN. Can you please tell me why is this so?
I will be really thankful to you.
Updated mod file is attached herewith.
Ramsey_updated.mod (2.3 KB)

Your steady state does not make sense. Y=0.3958 with G=1 implies negative consumption, for example.

Hello professor,

Thank you so much for your reply. I updated my codes by adding more nonlinear equations (wages and prices) which has instruments. I got SS of all variables but SS of G is still weird from other variables. I also got IRF for A shock but still i have some NAN values for some variables in my results. Please have a look on my mode file and guide me where is problem in my model. I got SS by setting instruments equal to zero.

Updated mod file is attached herewith for your consideration please.
ramsey_model.mod (4.6 KB)

Best

Something in your model is still missing. The only place Tx and Fr` show up is

[name='budget constraint'] //10
Fr+Tx=G +Un*z + chi*gammag*Vg + chi*gammab*Vb;   

so they are perfect substitutes and indistinguishable.

Happy New Year.
Hope you are doing well. I have changed the model the above mentioned Equation. My policy instruments are Fr and chi. I separated the above equation and not i have
Tx=G +Unz;
Fr=chi
gammagVg + chigammab*Vb;
And last budget constraint equation is
Y=C+G
But i am still getting error while estimating my model. Previously i was using SS values from my linear model but now i tried with nonlinear model. I am able to find SS values of all variables but problem is SS value of G is so small. Can you please guide me How i can solve this problem.

Error which i am getting is as follows:

Warning: Matrix is close to singular or badly scaled. Results may be inaccurate. RCOND = 9.320566e-37.

after this error model works but af the end i again got this error
Note: warning(s) encountered in MATLAB/Octave code

Best

Please provide the updated model-file.