RBC Model with endogenous labor supply

Steady state
1

Hello everyone,

I am trying to solve a RBC model with endogenous labor supply, however I get the error message “Impossible to find the steady state. Either the model doesn’t have a steady
state, there are an infinity of steady states, or the guess values are too far
from the solution.” Meaning all my steady states are not computed and I get the further error that my steady state contains NaN or Inf.

The production function is

yt = exp(theta_t)k^α h^(1−α)

with theta being AR(1) serial correlated:

theta = ρ*theta(-1) +εt.

The utility function is

U( c )= c^(1−σ)/(1−σ) −θ*h^(1+χ)/(1+ χ)

Your help would be greatly appreciated. Thanks.

RBC.mod (1000 Bytes)

2

Your computation
kss=((beta*uss*alpha)/(1-beta*(2-delta)))^(1/(1-alpha));
must be incorrect, because it returns a complex number. Did you have a look at