Thanks Michel.

There are several problems with your *.mod file

- when you use ramsey_policy, you need to remove the policy rule, because it is the ramsey_policy procedure that computes an equivalent of the policy function
- because your model “lacks” now an equation, it doesn’t make sense to use the steady command. It is the ramsey_policy procedure that computes the steady state under optimal policy
- using the welfare definition creates problems when computing ramsey_policy
- instead of using initval, I use steady_state_model that computes analytically the steady state for a given value of R taken as instrument
- it is not always possible to use a different value of the planner discount factor and of private agents discount factor. In your example, it doesn’t work, at least not with the values that you had chosen.

I attach an example that works at least with the unstable version of Dynare

Best

Michel

Mymodel.mod (1.09 KB)