Unstable system or multiple steady states error

Dynare help (legacy posts)
1

Hi,
I have just started learning dynare. I am trying to run a simple RBC model. When I run my code (attached) I keep getting the following error

Error using print_info (line 57)
Impossible to find the steady state. Either the model doesn’t have a steady state, there
are an infinity of steady states, or the guess values are too far from the solution

Error in steady (line 92)
print_info(info,options_.noprint);

Error in irelandex3 (line 125)
steady;

Error in dynare (line 120)
evalin(‘base’,fname) ;

I have taken the model from an academic article and I have hence used the steady state values reported in the paper and I double-checked them in matlab. It would seem strange to me if the steady state values I have listed are wrong. I also tried writing a code for the log-linearized version of the model and it works. So I really don’t know where I am getting the model wrong.

I would appreciate any help by more expert users.
Thanks a lot!
irelandex3.mod (653 Bytes)

2

I am not sure where you got the steady state values, but the steady state for technology a is clearly 1 and not 6.

3

I copied it it from replication matlab (not dynare) code of the paper I am trying to replicate.
Actually, the original TFP process used in the paper was ln(a_t)=(1-rho)ln(abar) + rholn(a_t-1) + e_t
which in dynare I initially wrote as ln(a)=(1-rho)ln(abar)+rholn(a(-1))+e
But it wasn’t working
I just tried changing the steady state value to a=1 but it still doesn’t work
I am attaching my original code and a written down copy of the model.
If you want I can also attach a link to the paper.
Thanks for the help!
irelandex3.mod (666 Bytes)
model.pdf (16.9 KB)

4

Given that you changed the exogenous process, use pencil and paper to calculate the steady state values. Given the small size of the model, this should be extremely straightforward.

5

Hi, my apologies, there was a silly typo in the capital flow equation
I had typed and “i” instead of a 1: etak=(i-delta)k(-1)+i instead of etak=(1-delta)(k-1)+i

many thanks again for your help

6

If you are interested in replication, this might be of interest to you: ReplicationWiki