Simple Collateral Constraint Model but I can't find Steady State


#1

Hi all;model1.mod (3.0 KB)

I’ m trying to run a simplified version of Iacovello & Neri (2010). Model have patient and impatient households which latter one has collateral housing constraint. Codes and technical appendices of the paper are very useful for me. But when I run my code, Dynare giving the error which “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.”

Here are the residuals of the equations:
Equation number 1 : 0
Equation number 2 : 0
Equation number 3 : 0
Equation number 4 : -1.516e-005
Equation number 5 : -1.516e-005
Equation number 6 : 0.21095
Equation number 7 : -0.012876
Equation number 8 : 0.005219
Equation number 9 : -0.4877
Equation number 10 : -0.0503
Equation number 11 : 0.49769
Equation number 12 : 0
Equation number 13 : 0.21114
Equation number 14 : 8.5365e-005
Equation number 15 : -0.0002773
Equation number 16 : 0
Equation number 17 : 2.7342e-007
Equation number 18 : 0
Equation number 19 : 0
Equation number 20 : 0
Equation number 21 : 0

They are very very small, but doesn’ t converge. I changed initvalues or calibrations many times, but doesn’t work. I’m grateful for any help.

Also, maybe writing an external steady state Matlab file will be solution, but I don’t know how I’ll do that exactly.

Best.


#2

What you are reporting above are the residuals after steady state finding. The ones before the search based on your initial guesses are a lot bigger. Are you really sure your model equations are correct and allow for a steady state?