Hello!

I am trying to replicate a model by Anand and Prasad(2010) for a class project but I am struggling to compute the steady state values. I keep getting the following error and frankly, I am at a loss as what to do.

STEADY: The Jacobian contains Inf or NaN. The problem arises from:

STEADY: Derivative of Equation 8 with respect to Variable Ctf (initial value of Ctf: 2)

STEADY: Derivative of Equation 8 with respect to Variable Cts (initial value of Cts: 2)

STEADY: Derivative of Equation 8 with respect to Variable xst (initial value of xst: 0)

STEADY: Derivative of Equation 9 with respect to Variable xst (initial value of xst: 0)

STEADY: The problem most often occurs, because a variable with

STEADY: exponent smaller than 1 has been initialized to 0. Taking the derivative

STEADY: and evaluating it at the steady state then results in a division by 0.

Practically a new student at Dynare! Any help is deeply appreciated!

Thanks

diss3.mod (1.32 KB)

Recheck both the model equations and the initval block:

- In the initval block

```
xst=(theta/theta-1)*mct;
```

the mct is not defined yet and there is a bracket missing as otherwise the bracket always evaluates to 0

2. ```
Aft(+1)=rhoaf*Aft + epsxi;
```

has a problem with timing (it should be lagged by one period) and should be in logs. Currently the equations has steady state `Aft=0`

, but that

is incompatible with e.g.

```
xft=phin*((yft)^(psi))*((Ctf)^(sigma))*((Aft)^(-1-psi));
```

where Aft must be 1

Thanks for the help. I made the aforementioned corrections yet I am still not able to calculate the steady state values. Is there anyway that can be bypassed on Dynare and still generate the required results? I am getting the following error:SOLVE: maxit has been reached

[quote]Residuals of the static equations:

Equation number 1 : 0.12723

Equation number 2 : 0.0096714

Equation number 3 : 0.14266

Equation number 4 : 0.22491

Equation number 5 : 0

Equation number 6 : 0.54044

Equation number 7 : 0.25168

Equation number 8 : 0.12782

Equation number 9 : -0.039531

Equation number 10 : 0

Equation number 11 : 1.8909

Equation number 12 : 0

Equation number 13 : 0

Equation number 14 : 0

Equation number 15 : 0

Error using print_info (line

74)

Impossible to find the steady

state. Either the model

doesnâ€™t have a steady state,

there are an infinity of

steady states, or the guess

values are too far from the

solution[/quote]

I attached the file and the equations I am trying to replicate. Any assistance is deeply appreciated. I am in need of dire help!

relevant equations.pdf (149 KB)

diss3.mod (1.38 KB)

One of the problems in your mod-file is that there is no unique steady state, making it impossible to use a solver the way you do. The first issue is the collinearity in the Taylor rule, see [An infinity of steady states with Taylor rules)

I would strongly recommend computing the steady state analytically-