Hello,

I was asked to find the steady-state of a RBC model with variable capital utilization.

the utility function is given by ln Ct + chi*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*(ut)^(delta_1). 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.

I’m a PhD student and I’m new to dynare so please forgive me if I made any basic mistake.

Thank you.ex1bRBC.mod (1.0 KB)