# Problems with Neo Keynesian Model

Hi

I’m trying to make this NKM run, but I’m stuck. Maybe someone knows whats the problem. I think that one of the steady states is missing. I’m not sure if I need to give an steady state value for each variable.This is a modification of the Christiano Eichenbaum Evans (2005) paper (attached)

Configuring Dynare …
[mex] Generalized QZ.
[mex] Sylvester equation solution.
[mex] Kronecker products.
[mex] Sparse kronecker products.
[mex] Bytecode evaluation.
[mex] k-order perturbation solver.
[mex] k-order solution simulation.

Starting Dynare (version 4.1.3).
Starting preprocessing of the model file …
Found 26 equation(s).
Evaluating expressions…done
Computing static model derivatives:

• order 1
Computing dynamic model derivatives:
• order 1
Processing outputs …done
Preprocessing completed.
Starting MATLAB/Octave computing.

Warning: Divide by zero.

In Final_static at 20
In dynare_solve at 70
In Final at 248
In dynare at 132
Warning: Divide by zero.
In Final_static at 25
In dynare_solve at 70
In Final at 248
In dynare at 132
Warning: Divide by zero.
In Final_static at 27
In dynare_solve at 70
In Final at 248
In dynare at 132
Warning: Divide by zero.
In Final_static at 29
In dynare_solve at 70
In Final at 248
In dynare at 132
Warning: Divide by zero.
In Final_static at 29
In dynare_solve at 70
In Final at 248
In dynare at 132
Warning: Divide by zero.
In Final_static at 116
In dynare_solve at 70
In Final at 248
In dynare at 132
Warning: Divide by zero.
In Final_static at 116
In dynare_solve at 70
In Final at 248
In dynare at 132
STEADY: numerical initial values incompatible with the following equations
1 16 17

I attached the *.mod file

Thanks

Sebastián
papermacro.pdf (408 KB)
Final.mod (2.3 KB)

Check your initial values. When you compute

```C=((1-beta*b)/(1-b))*((e_w-1)/e_w)*(K/H)*(W_A/H); ```
W_A was not defined yet and is set to 0.