Unable to find steady state

Occbin
1

Goodmorning, I’ve been working with models of Sudden Stops which I always solved by global methods, I’m trying to replicate the model in “Approximately Right?: Global v. Local Methods for Open-Economy Models with Incomplete Markets” by Oliver de Groot,Ceyhun Bora Durdu, Enrique G. Mendoza.
I face two problems, the first is related to the way in which the occ binding constraint is formulated in the paper (formulated as a max) which I assume is related to how older versions of Dynare used to approach the problem, however I’m unable to find a steady state (Mendoza_2.mod).
The second problem I encounter is related to a newer formulation of the model (Mendoza.mod), where again I’m unable to solve the model.
Both models feature the standard DEIR function.

Thank you in advance for your help!

Andrea

Mendoza_2.mod (2.8 KB)
Mendoza.mod (2.6 KB)

2

In Mendoza.mod your definition of initial values is not recursive:

w = l^(pOmega-1)*(1+pTaxCons);
l = pAlpha*y/(w*(1 + (r-1)*pPhi));

The first line uses l, which is only defined in the next line using w. That won’t work.

The second file has a bunch of variables that were not defined in the var statement.