Residuals are not equal to zero yet solves the model

Steady state
1

Hello,

How is it possible for dynare to solve the mod file when the residuals of static equations are not equal to zero?

Thanks.

2

It uses an equation solver. The residuals are only the residuals at the starting values for the steady state search.

3

Hello thanks for your reply. After solving the model, I check the residuals with resid(1) and the residuals of the static equations were non-zero. I find it puzzling that dynare solves the model without any error.

4

How big are the residuals? Dynare has a tolerance of about 1e-6.

5

Residuals are from 0.32 to 14.2.

6

That is strange. I would need to see the files.

7

Hello,

I have attached the file. updatediv.mod (19.1 KB)

The problematic variables are “log_div” and “log_dep_saver”. I tried values for both of these variables and the code runs however the residuals are not zero.

I also tried putting equations in the initval, but, residuals are 0.018494 and 0.0001767 with error impossible to find the steady state.

Thanks.

8

As I said, you need to check residuals after steady state computations, not before. Putting resid after steady shows residuals smaller than 1e-6.

1 Like
9

Thanks for your reply.