I am studying Ramsey optimal policy problem using mod.file from professor Pfeifer’s GitHub. It generates IRF well but consistently yields zero approximated welfare(for both conditional and unconditional). I experienced similar results from Willi Mutschler sample code file.

example.mod (7.2 KB)

It seems the problem comes from the below warning but I cannot exactly figure out why welfare estimates are zero.

Warning: Some of the parameters have no value (Omega, lambda, kappa, vartheta) when using stoch_simul. If these parameters are not initialized

in a steadystate file or a steady_state_model-block, Dynare may not be able to solve the model. Note that simul, perfect_foresight_setup, and

perfect_foresight_solver do not automatically call the steady state file.

How can I get exact welfare estimate by modifying above mod file?