The Steady state file do not compute the Steady State for the endval in Perfect Foresight

Steady state
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Test_steadystate.m (3.7 KB)
Test.mod (9.0 KB)
FindSS.m (1.1 KB)
param.m (4.0 KB)

Hi all,

I am running a simulation of the introduction of a permanent tax under perfect foresight. However, when using the endval values for the tax, Dynare reports that the Steady State file did not compute the Steady State. Interestingly, it is able to find the Steady State under the initval.

Has anyone encountered a similar issue? Any insights on potential causes or solutions would be greatly appreciated.

Thanks in advance!

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You are loading an x0 you did not provide.

3

I am sorry, professor. Here is the x0 matrix. Thanks
x0.mat (204 Bytes)

4

My hunch is that within the steady state file you did not fully account for tau being different from 0. The value you compute for yB is consistent with equation 16 but not 12, which points to a conceptual issue.

1 Like
5

Thank you! I will check on that then. I appreciate it.