The steadystate file did not compute the steady state - DSGE with Search

Hello, I am trying to make a DSGE model with Search frictions and Dynare tells me that it can’t solve the steady state. Nevertheless, I already reviewed the equations and all of them have zero residuals when they are evaluated at steady state. Can you orientate me on this? I attach my model code.

Thank you very much for your help



Residuals of the static equations:

Equation number 1 : 0
Equation number 2 : 0
Equation number 3 : 0
Equation number 4 : 0
Equation number 5 : 0

Equation number 130 : 0
Equation number 131 : 0

Error using print_info (line 72)
Error in steady (line 92)
print_info(info,options_.noprint, options_);
Error in Search_BCU_prueba3_sinCL (line 1492)
Error in dynare (line 180)
evalin(‘base’,fname) ;

Search.mod (42.2 KB)

The problem is circular definitions of parameters in the steady_state_model-block. The correct order needs to be

R_ss        = a_ss*pi_ss/BETTA;                             %(EE.1)
Rreal_ss    = R_ss/pi_ss;

Otherwise, you will rely on an old value of R_ss when computing Rreal_ss

Thank you very much for your response!!

Dear Mr Pfeifer,

I am facing another problem with this model: the rank condition isn’t verified. I’ve already run the model_diagnostics and nothing comes out. I also checked if there is a timing problem but I don’t see anything. What else can be wrong? Thank you in advance for your response. I am running the model with Dynare 4.4.3.

There are 42 eigenvalue(s) larger than 1 in modulus
for 41 forward-looking variable(s)

The rank condition ISN’T verified!

Error using print_info (line 42)
Blanchard Kahn conditions are not satisfied: no stable equilibrium
Error in stoch_simul (line 98)
print_info(info, options_.noprint, options_);

Search_BCU_sinCL.mod (42.0 KB)