I was asked to find the steady-state of a RBC model with variable capital utilization.the utility function is given by ln Ct + theta*ln(1-Nt). Capital services are defined as kt=ut* Kt and the dependence of capital depreciation on capacity utilization is modeled as delta(ut)=delta_o+ phi_1(ut -1)+{(phi_2)/2}*(ut- 1)^2
I was asked to find the steady state of the model normalizing utilization 1.
I’ve uploaded the code I wrote and which is not working. Can someone please tell me what I’ve done wrong.
thank you
wedidit.log (628 Bytes)