In the log-linearised model, steady-state values of variables is coming non-zero.
I have checked the residuals by using “resid” command. It is showing zero residual in all the equations.
What can be the issue?
try1_25.mod (5.7 KB)
You need to put resid before steady. The equation
%FOC of Bank capital (21)
(phi_v/L_F_ss)*(V_ss/L_F_ss)*(V-L_F-Rho) = gi_ss*(1+gi) ;
contains a constant term. I guess it’s the gi_ss*1
Thnx professor! Your are always a savior!! 