Steady State Solving

Dear All,

I am using Dynare to solve a two-country multi-sector IRBC model. When I solve a symmetric steady state (there is no borrowing-lending between the two countries, the trades are balanced, everything for the two countries are same), the initial number I put in can make the residuals of the static equations of one country to be zero, but the residuals of the static equations of the other country are off a lot.

Could anyone please tell me how to find the problem? Does Dynare compute steady state with certain order?

Thank you a lot!

When I use the unstable version of Dynare together with

steady(maxit=1000) ;
Dynare is able to find the steady state. However, this a collinearity issue. Run model_diagnostics to see this.

Hi Jpfeifer,

Thank you so much for your help, I will recheck the model.

I can find the solution to the steady state of my model using two matlab files. Since my steady state equations are nonlinear, I’m using fsolve.