Goodmorning,

I had to start all over again, line by line with the coding and dynare is still giving me the same response

“ERROR: epsAS epsRS not used in model block. To bypass this error, use the `nostrict`

option. This may lead to crashes or unexpected behavior.”

See the code again.

var y c h I kp kg w r gc gi gt rb b lambda epsA epsR;

varexo epsAS epsRS;

parameters betta alphaa theta1 theta2 theta3 delta_p delta_g gamma tau_c

tau_k tau_h rhoA rhoR;

betta = 0.922;

alphaa = 0.3501;

theta1 = 0.2413;

theta2 = 0.6381;

theta3 = 0.1206;

delta_p = 0.070;

delta_g = 0.016;

gamma = 0.020;

tau_c = 0.050;

tau_k = 0.300;

tau_h = 0.200;

rhoA = 0.9933;

rhoR = 0.9475;

model;

theta1/c=lambda*(1+tau_c);

theta2/1-h=lambda*(1-tau_h)*w;*

lambda=bettalambda(+1)*((1-tau_k)**r(+1)+(1-delta_p));*

lambda=bettalambda(+1)(1+rb(+1));

y=epsA*kp^alphaa*h^1-alphaa*(gi)^gamma;

w=(1-alphaa)*y/h;*

r=alphaay/h;

kp(+1)=I+(1-delta_p)*kp;*

kg(+1)=I+(1-delta_g)*kg;*

gc+gi+gt+(1+rb)b=b(+1)+tau_cc+tau_kr*kp+tau_h*w*h+epsR;*

gc=y;

gi=y;

gt=by;

log(epsA)=rhoA*log(epsA(-1))+epsAS;*

log(epsR)=rhoRlog(epsR(-1))+epsRS;

y=c+kp(+1)-(1-delta_p)*kp+gc+gi;

end;

steady_state_model;

y=1.0000;

c=0.5874;

h=0.33; // This is an exogenously set target.

I=0.1977;

kp=I+(1-delta_p)*kp;

kg=I+(1-delta_g)*kg;

w=(1-alphaa)*y/h;*

r=alphaay/kp;

gc=0.07102;

gi=0.1309;

rb=0.0871;

b=0.4901;

end;

steady;

shocks;

var epsAS; sigmaA;

var epsRS; sigmaR;

end;