Hello,

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

2

??? Error using ==> dynare_solve at 82

exiting …

Error in ==> steady_ at 124

[oo_.steady_state,check] = dynare_solve([M_.fname ‘_static’],…

Error in ==> steady at 52

steady_;

Error in ==> ramsey at 174

steady;

Error in ==> dynare at 132

evalin(‘base’,fname)

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)