Problems with the steady state

General DSGE Modeling Replication Attempts
1

Hi,

I am replicating Gali chapter 2 by writing up my own dynare. I know that there might be some code available online. However, I would like to experience hand on. Here is the error message:

" Impossible to find the steady state. Either the model doesn’t have a steady
state, there are an infinity of steady states, or the guess values are too
far from the solution"

How can I overcome such problems? Could you please show me some guidance?
Please see the code in .mod file below.
Thank you
Mr.S

Classical_mon.mod (1.2 KB)

2

The problem is that you are not consistently handling the constant term in the respective equations. Some of the equations have the constant, others do not.

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