Residuals of the static equations - problem

Dynare help (legacy posts)
1

Hi, Im trying to run A basic new-keynesian model with Epstein-Zin preferences (its a simple version of Swanson´s working paper "A Macroeconomic Model of Equities and Real, Nominal, and Defaultable Debit). But I’ve got this problem:

Residuals of the static equations:

Equation number 1 : 0.020525
Equation number 2 : 0.87743
Equation number 3 : 0.99
Equation number 4 : 0.14159
Equation number 5 : 0.025505
Equation number 6 : 0.0088414
Equation number 7 : 3.8788
Equation number 8 : 0.062289
Equation number 9 : 0.4588
Equation number 10 : -0.020182
Equation number 11 : 0.010517
Equation number 12 : -0.10875
Equation number 13 : 1.5278
Equation number 14 : -0.032578
Equation number 15 : -0.026942
Equation number 16 : 0

But I calculate steady state by hand 3 times in a row… My model is attached. I have doubt about my Epstein-Zin preference (using auxiliary Variable). Could help me???

Thanks.
modelo1_EZ_persistente.mod (3.17 KB)

2

If you have residuals I think there are two things that might went wrong:

  1. Your steady states are plainly wrong.
  2. The ordering of your steady state equations is messed up. Example:
    B_ss = 5,
    A_ss = B_ss + C_ss,
    C_ss = 2
    Even if each equation might be right, A_ss will have value 5 instead of 7.

Otherwise I highly recommend Mr. Pfeifer’s Website (sites.google.com/site/pfeiferecon/dynare) and the codes made avaible there. Especially the Caldaraetal2012.mod might help you in implementing the Epstein-Zin preferences.

3

Thanks a lot. im gonna check Caldaraetal2012.mod. Im pretty sure my steady states are right.