Can anyone help me?
I am trying to run simple mod file to get ramsey policy rule, under only sticky price NK model.
Whenever I run the mod file, though, I get the error code: You cannot include exogenous variables in the planner objective. I can not see what this means. I attach my files.
Another question is that as far as I understand, when I run ramsey_policy, steady and check block are not required. Is thic correct?
I appreciate in advance for your kind reply.
- Dynare is case-sensitive. You are using
ln(C)' but it must beln©’. @sebastien I think this error message is a bug.
- Yes, those two command are not required (they never are, independent of Ramsey)
To be more precise, in Dynare, variable names are case-sensitive, but keywords are case-insensitive.
I admit this message is a bit confusing. Since
C (in capital) is unknown to the preprocessor at this point, it is automatically considered as an exogenous variable (with the new on-the-fly type declarations mechanism). Hence the error message.
I don’t really know how to improve the situation without going against the on-the-fly type declaration mechanism.
Does it make any sense that my model (an open ec. model for 2 countries) is working (including BK Conds) with simple rules but the solution generated by the following lines doesn’t satisfy the Blanchard Kahn conditions:
%// Objective function and discount factor planner_objective Util1 + Util2 ; ramsey_model(instruments=(tau1,tau2), planner_discount=beta );
I must mention that if I only use Util1 it works. It’s the joint utility maximization the one that holds 1 eigenvalue>1 more than the number of variables.
Have you tried different starting values for the instruments. Sometimes there are different steady states and you converge to one where the BK conditions are not satisfied.