Seeking advice for a 3-agent 2-sector NK-DSGE model

Steady state
1

Hi Professors,

As an exercise, I’m trying to extend the TANK model with housing and consumption from Mora-Sanguinetti & Rubio (2014) (Redirecting) by adding a representative HtM household who also rents from the wealthy savers. This is very similar to another paper by Eskelinen (2021) (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3929824) , but with more bells and whistles.

I tried solving for the analytical steady state and writing down those expressions in a steady_state_model block, but so far the model is still unable to converge. I am fairly inexperienced with DSGE modelling, so debugging has been quite difficult.

I’ve attached the model’s files below, accompanied by a link to a html file with the model’s equations. I’d really appreciate any help I could get, TIA!

dsge_ver3_test.log (4.7 KB)
dsge_ver3_test.m (7.8 KB)
dsge_ver3_test.mod (10.1 KB)

2

That is a tricky problem. The model is quite big. Either you keep on debugging or you need to start with a simpler version of the model where you can compute the steady state and then iteratively add features.