I’m trying to run this “small open economy” model on Dynare. But it says that there is not steady state:

“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”

Can someone tell me what I’m doing wrong? I upload the .mod file as .txt modelo16.txt (1.25 KB)

Try to compute the steady stata analytically using pencil and paper. For your model, this should be straightforward. On my machine, Dynare finds the following steady state:

[quote]STEADY-STATE RESULTS:

y -4.08625
c 1.95484
k -6.1014
l 0.0958977
w 0.697914
r 0.235592
z 1
b -0.353146
Te 0.579002[/quote]

But negative capital makes no sense. Check your parameters. Particularly the beta seems really low.

Finally, not that you are violating Dynare’s timing convention. You will need:

Apart from completely wrong timing for x and the predetermined stocks (which do not affect the steady state, but need to be fixed later), your initial values are too poor. In particular, l needs to be between 0 and 1, but you start it at 2. Please try to compute the steady state analytically.

[code]MODEL_DIAGNOSTICS: The Jacobian of the static model is singular
MODEL_DIAGNOSTICS: there is 1 colinear relationships between the variables and the equations
Colinear variables:
c
l
k
b
e
y
tb
Colinear equations
3 5 9 10 11 12 13

MODEL_DIAGNOSTICS: The presence of a singularity problem typically indicates that there is one
MODEL_DIAGNOSTICS: redundant equation entered in the model block, while another non-redundant equation
MODEL_DIAGNOSTICS: is missing. The problem often derives from Walras Law.[/code]

There must still be a mistake in your model equations. Your steady state for l is not between 0 and 1.

Bond and capital are predetermined. Given the way you entered these variables with beginning of period stock notation, you need

predetermined_variables k b;
Moreover, the exogenous processes should be backward-looking, i.e.