Dear all,
I have been trying to replicate the Gertler Kiyotaki model (2010) with interbank frictions for my master’s thesis. First I tried to code the appendix 1 case for imperfect interbank market however the model is highly non linear and after many failed attempts to achieve steady state convergence, I decided to give the simpler version of the model, that is with frictionless interbank markets, a try.
However, I still fail to reach a steady state.
I tried calibrating the steady state values but with no use.
I am a total beginner with Dynare and this is my attempt at coding a model.
I am attaching the code for the frictionless interbank market case.
Any help would be greatly appreciated.
Many thanks,
Nikos
frictionless_GK.mod (2.5 KB)
Check all your model equations again. For example,
MODEL_DIAGNOSTICS: The following endogenous variables aren’t present at the current period in the model:
Rk
Omega
Hi man,
I have also follow this paper and meet the same problems as you. I cannot find the steady state too. I want to know if you have solved this problem. If it is solved, can you tell me how to solve it? Thank you very much.