Steady State not calculated

Hi. I’m new to Dynare and I want to replicate the result of Kiyotaki et al(2020) using Dynare.

(Housing, Distribution and Welfare by Nobuhiro Kiyotaki, Alexander Michaelides, Kalin Nikolov :: SSRN)

I wrote a mod file but it turned out that it could not produce a steady state with an automatic “steady;” block.

I think I followed any rule and carefully copied the equations, parameterization, and so on…

The error message that I get is the following:

Impossible to find the steady state (the sum of square
residuals of the static equations is 17790.8330). 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


Could you look at the mod file and give me any advice to help me out of here?

Thank you for reading.housing_new.mod (1.3 KB)

Hi Kyusik,

welcome in the forum :slight_smile:
When you put the commands


in your code you will see that there are some errors. The main problem is that you did not declare initial values for all endogenous variables. If this is the case, Dynare assumes 0 and for instancen equation 3 then has 0/0. Maybe you have some more information regarding the steady state that you could use as initial values or calculate it yourself? The model does not seem too large, maybe it is possible to analytically calculate the steady state. If that is possible, that would definitely solve your problem and should be your go to strategy.