Steady state error: The steady state file did not compute the steady state

Steady state
1

Hi,

I am trying to run a Medium Scale DSGE model with Dynare. However, I encountered the error message below. I checked the resid terms. It seems that the problem is in equation No.3 and No. 16. But I am not sure what should I do. Could someone help? Thanks!

Error using print_info (line 76)
The steadystate file did not compute the steady state

Error in check (line 76)
print_info(info, 0, options);

Error in ff (line 517)
oo_.dr.eigval = check(M_,options_,oo_);

Error in dynare (line 235)
evalin(‘base’,fname) ;

Residuals of the static equations:

Equation number 1 : 0 : FOC for Consumption
Equation number 2 : 0 : FOC for Bond Holding
Equation number 3 : 0.04715 : FOC for Dposits
Equation number 4 : 0 : FOC for Wage
Equation number 5 : 0 : Def h1
Equation number 6 : 0 : Def h2
Equation number 7 : 0 : FOC for K & N
Equation number 8 : 0 : FOC for Price
Equation number 9 : 0 : FOC for Real Wage
Equation number 10 : 0 : Def Price Diffusion Index
Equation number 11 : 0 : Def x1
Equation number 12 : 0 : Def x2
Equation number 13 : 0 : Def mc
Equation number 14 : 0 : FOC for Capital Utility
Equation number 15 : 0 : FOC for Investment
Equation number 16 : -0.046915 : FOC for Capital
Equation number 17 : 0 : Def Collateral Ratio
Equation number 18 : 0 : Def K_hat
Equation number 19 : 0 : Def Capital Accumulation
Equation number 20 : 0 : FOC for Deposits
Equation number 21 : 0 : FOC for Loans
Equation number 22 : 0 : BC-Capital adequacy constraint
Equation number 23 : 0 : Def Capital adequacy ratio
Equation number 24 : 0 : Goods Market Clear
Equation number 25 : 0 : Goods Market Clear II
Equation number 26 : 0 : Credit Market Clear I
Equation number 27 : 0 : Credit Market Clear II
Equation number 28 : 0 : Def Taylor rule of Monetary Policy
Equation number 29 : 0 : Def Government Expenditure
Equation number 30 : 0 : Def tauc
Equation number 31 : 0 : Def taun
Equation number 32 : 0 : Def tauk
Equation number 33 : 0 : Def inflation rate
Equation number 34 : 0 : Def productivity shock
Equation number 35 : 0 : Def marginal efficiency of investment shock
Equation number 36 : 0 : Def intratemporal preference shock
Equation number 37 : 0 : Def intratemporal preference (labor supply) shock
ff.mod (8.4 KB)
ff_steadystate.m (2.9 KB)

2

The two equations with residuals are inconsistent given the provided values. You can verify that your steady state is not consistent with equation 3 that says:
lamb*(1-tauk)*R=mu*cdelta_1

1 Like
3

Thanks for your hint! I have solved the problem. However, after I run the .mod file, it gives me the following error message:

MODEL_DIAGNOSTICS: No obvious problems with this mod-file were detected.
Error using print_info (line 42)
Blanchard Kahn conditions are not satisfied: no stable equilibrium

Error in stoch_simul (line 100)
print_info(info, options_.noprint, options_);

Error in ff (line 538)
info = stoch_simul(var_list_);

Error in dynare (line 235)
evalin(‘base’,fname) ;

Do you have any suggestions on where went wrong…?

Thank you so much!!

ff_steadystate.m (3.6 KB)
ff.mod (8.9 KB)

4

This model and code is similar to Wenli Xu(2019)?

5

Your timing for capital is wrong. Capital itself is predetermined, but not capital services.