Dear users,

I am in the beginner level of Dyanre and DSGE model.

I am very interested in DSGE model with financial frictions. To this end, I studied the Kiyotaki and Moore (1997) ‘Credit cycles’ paper using Dynare and did the replication of this paper. Then I chose the paper: **“Investor borrowing heterogeneity in a Kiyotaki–Moore style macro model Economics Letters 130 (2015) 75-79 by Maria Teresa Punzi and Katrin Rabitsch** in order to better understand the more realistic case with heterogeneous agents and tried to write Dynare code based on Kiyotaki and Moore (1997) model.

Following the paper setting & equations with one representative saver, 5 heterogeneous investors, and one representative firm, I understand that I should finally set the economy with 53 endogenous variables to compute. Thus I did write the attached Dynare file.

My current Dyanre file however has some error messages and does not work as follows:

Starting Dynare (version 4.5.1).

Starting preprocessing of the model file …

Found 53 equation(s).

Evaluating expressions…done

Computing static model derivatives:

- order 1

Computing dynamic model derivatives: - order 1

Processing outputs …

ERROR: Can’t open file ResearchProject_exercise/checksum

Now I feel that I get lost in the replication processes . Anyone could help me?ResearchProject_exercise.mod (11.1 KB)

1-s2.0-S0165176515001007-main Investor borrowing heterogeneity in a Kiyotaki–Moore style macro model.pdf (549.4 KB)