I am trying to solve for the optimal tax rate on profits, but I keep getting the following error message:
STEADY: numerical initial values incompatible with the following equations
??? Error using ==> dynare_solve at 82
Error in ==> steady_ at 124
[oo_.steady_state,check] = dynare_solve([M_.fname ‘_static’],…
Error in ==> steady at 52
Error in ==> ramsey at 174
Error in ==> dynare at 132
I checked carefully the calibration and it seems to be OK: when evaluated at the steady state all equation line up.
Could you please give me an idea where the problem can be??? Attached is the code. Thanks!!!
ramsey.mod (1.98 KB)