Problems with finding steady state for RBC model

Hey, I’m relative new to Dynare. I’m trying to recreate Eric Sims RBC model, where he extends it with real financial frictions. I am however not able to solve the model in Dynare. Can anyone help me?

BA_Model.mod (2.2 KB)

Try: BA_Model.mod (2.2 KB)

thank you so much, I really apreciate it

Hey Johannes,

I have tried your approach and my model now works, but as soon as I want to log-linearize (by taking exp()) to the endogenous variables it cannot find an solution.

BA_Model_v2.mod (2.5 KB)
BA_Model_v2_log.mod (2.6 KB)

But why would you want to do that? There are better alternatives: