Problems finding the steady state

Hello everybody,

I am working on a search and matching model with endogenous separations and hirings which I extended to incorporate short-time work. The model’s objective is to analyze how optimal STW-arrangements respond to a recessionary shock.

Unfortunately, the program does not run as the initial values listed in the initval-block don’t seem to fit. I get an error message saying that it is impossible to find the steady state.
I’ve tried multiple versions of initial values. However, I can’t figure out what causes the trouble.
The forum advises to check equations with big residuals (in my case eq. #2 and #29). Yet, I didn’t manage to provide initial values to make to code work. STW_US_calib.mod (11.1 KB)

Help would be highly appreciated, especially as this project concerns my thesis :slight_smile:


For a model of that size, it is often hard to find out whether the problem is with initial values or whether there is still a mistake somewhere in the codes. Often, the only way out is to either simplify the model and then rebuild it from a working version or to compute the steady state analytically.