RBC with distortionary Taxes

Dear all,

I am trying to expand my model with distortionary taxes. Everything runs up until that point. So I think my mistake is somewhere in the tax-process. Does anyone see my mistake?

Thank you!
sims2distax.mod (1.5 KB)

I can run your model. What is the problem you experience?

That’s interesting. If I run the model, I get the following error:

Error using print_info (line 74)
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
Error in steady (line 92)
print_info(info,options_.noprint, options_);
Error in sims2distax (line 228)
Error in dynare (line 180)
evalin(‘base’,fname) ;

Please try the unstable version of Dynare.

The unstable version of dynare gives me the same error.

It’s running with Dynare 4.3.3. Thank you!