Steady State Problem: Homotopy

Perfect foresight simulations
1

Hello Dynare;
I’m trying to make a perfect foresieght exercice a la Trabandt and Uhlig (2015) using dynare 5.2
Laffer_transition1.mod (5.7 KB)

The error message :

Reference to non-existent field ‘homotopy_values’.

Error in steady (line 48)
[M_,oo_,info,ip,ix,ixd] = homotopy1(options_.homotopy_values,options_.homotopy_steps,M_,options_,oo_);

Error in Laffer_transition1.driver (line 326)
steady;

2

You are missing a homotopy_setup block.

3

Thank you sir for repplying;
eventually i set this block using :
// Solve for Initial Steady State
steady(homotopy_mode = 2, homotopy_steps = 50);
homotopy_setup;
tauk_V,0,tauk_SS;
taun_V,0,taun_SS;
tauc_V,0,tauc_SS;
end;
but the problem persist
with the same error message :
Laffer_transition1.mod (5.9 KB)

4

You need to have the setup block before calling homotopy.

1 Like
5

Thank you so much sir. Could you, please, advise me how to perform an perfect foresieght exercice ? in the output , that i have, all variable remain stable and my goal is to see how macro fundamentals react to tax modifications.
Best regards