This issue came up under a different topic, but it’s really a separate issue, so I started a new topic. I am getting the error “trends not compatible with balanced growth path; the second-order cross partial of equation 22 (line 73) w.r.t. trend variable Bu and endogenous variable Omegauprime is not null (abs. value = 0.520612)…” I had written:
In the attached file, the model solves fine with gamu = 0.01 (line 33). If I change it to gamu=0.011, for example, I get that error. I’ve also gotten that error from changing initial values (even to those I think are closer to the steady state). gamu is the growth rate parameter of one of the two stochastic trends in the model.
Your growth factor specification
is incorrect. It must be
I tried that (in the attached file) but still get the same error. It works for gamu=0.01, but gamu=0.011 triggers the error.
investmentGE_Oct2021_hfac_UR_ML1.mod (4.2 KB)