Dear Dynare Assistants:
I apologize for this additional post over a related question that I asked last time – the model still does not seem to be working. To ease the interpretation of my question, I attached a pdf of the optimization problem I am solving – the social planner’s problem. C is consumption, H is hours worked, E is energy, K is capital.
Fortunately, the steady state seems to be close to convergence. As you suggested, I type a residual command so that each time I run the program I see the residuals. They are quite small:
Equation number 1 : 0.031914
Equation number 2 : 0.015809
Equation number 3 : -0.0434
Equation number 4 : 0.61771
Equation number 5 : 0.16
However, it still does not complete! I tried homotopy, with the commands below, but it did not work; delivered an error that it could not proceed after the first step
sigma_c, 0.5, 5.32;
sigma_h, 0.5, 0.02;
sigma_s, 0.5, 1.33;
steady(homotopy_mode = 1, homotopy_steps = 50);
As always, I appreciate your advice and insight into the problem.
PS, is there an easy way to run the model many times over a series of possible parameter values, i.e. to test the state state under different parameter values of a tax?
planner_toy.mod (1.97 KB)
Dynare forum question.pdf (151 KB)