Without steady states

Stochastic simulations
1

Hi everyone.
I am a student of dsge and I am learning two country models.
I obtained a dynare code which includes two coutry and monetary union, but the code cannot work correctly.
I added two equations of shock which is missed by the code which is pointed out by matlab.
Now, I meet a error which I cannot solve:

Using 64-bit preprocessor
Starting Dynare (version 4.6.4).
Calling Dynare with arguments: none
Starting preprocessing of the model file …
Found 188 equation(s).
Evaluating expressions…done
Computing static model derivatives (order 1).
Computing dynamic model derivatives (order 1).
Processing outputs …
done
Preprocessing completed.

Randomize initial guess…

Residuals of the static equations:

Equation number 1 : 10015373.9677 : Util_P
Equation number 2 : 5868204.1618 : Util_I
Equation number 3 : 1.1087 : Util
Equation number 4 : 6.1448 : Delta_w_I
Equation number 5 : 9.133 : Delta_w_P
Equation number 6 : -0.3594 : u_c_P
Equation number 7 : -1.3068 : u_c_I
Equation number 8 : -973.6064 : u_c_P_s
Equation number 9 : -954.6653 : u_c_I_s
Equation number 10 : -0.1359 : 10
Equation number 11 : -7.2859 : 11
Equation number 12 : -0.14671 : Ppsi_L
Equation number 13 : -2.3569 : 13
Equation number 14 : -3.9131 : 14
Equation number 15 : -45.7459 : Ppsi_L_s
Equation number 16 : 133.0742 : 16
Equation number 17 : 4787.2969 : 17
Equation number 18 : 9.8143 : Ppsi_chi
Equation number 19 : 182014.7407 : 19
Equation number 20 : 873918.5071 : 20
Equation number 21 : 792.5464 : Ppsi_chi_s
Equation number 22 : 10.5717 : 22
Equation number 23 : -376.8151 : 23
Equation number 24 : -58.7888 : 24
Equation number 25 : -5.3416 : 25
Equation number 26 : 0.22298 : 26
Equation number 27 : 8.0194 : 27
Equation number 28 : -3.1959 : c
Equation number 29 : -4.0107 : c_s
Equation number 30 : 7.2667 : cH
Equation number 31 : 2.6333 : cF
Equation number 32 : 1.1882 : cH_s
Equation number 33 : 4.7333 : cF_s
Equation number 34 : 3.0518 : w_P
Equation number 35 : 2.7794 : w_I
Equation number 36 : -1.5701 : w_P_s
Equation number 37 : -1.7215 : w_I_s
Equation number 38 : 35353.8924 : 38
Equation number 39 : 242843513983.7639 : 39
Equation number 40 : 95240779263.4585 : 40
Equation number 41 : 2227394167698.974 : 41
Equation number 42 : -2.562700664586749e+20 : Omega_w_P
Equation number 43 : -2.722570887716342e+22 : Omega_w_I
Equation number 44 : -2.399459834534456e+17 : Omega_w_P_s
Equation number 45 : -7.467518893425027e+17 : Omega_w_I_s
Equation number 46 : -44643462.3752 : Upsilon_w_P
Equation number 47 : -603702171.5671 : Upsilon_w_I
Equation number 48 : -1521002.0288 : Upsilon_w_P_s
Equation number 49 : -362742.2214 : Upsilon_w_I_s
Equation number 50 : -0.060355 : pi_zeta_w
Equation number 51 : 5.3748 : pi_zeta_w_s
Equation number 52 : 8.3524 : n_P
Equation number 53 : 7.9411 : n_I
Equation number 54 : -3.9532 : w
Equation number 55 : -12.9103 : n_P_s
Equation number 56 : -14.2887 : n_I_s
Equation number 57 : 1.1938 : w_s
Equation number 58 : -2.9834 : k
Equation number 59 : 1.072 : k_s
Equation number 60 : -4.8493 : p_ichi
Equation number 61 : -23245.8649 : p_ichi_s
Equation number 62 : -60.4839 : chi
Equation number 63 : -13893.1661 : chi_s
Equation number 64 : 4.7796 : i_chiH
Equation number 65 : 2.8584 : i_chiF
Equation number 66 : -0.94439 : 66
Equation number 67 : 0.75854 : i_chiH_s
Equation number 68 : -6.1701 : i_chiF_s
Equation number 69 : 0.4006 : 69
Equation number 70 : 4.5799e-05 : 70
Equation number 71 : -0.067494 : 71
Equation number 72 : -0.00013249 : 72
Equation number 73 : -1868979.6743 : 73
Equation number 74 : 1.5368 : mc
Equation number 75 : 1.1885 : 75
Equation number 76 : 7.7434 : mc_s
Equation number 77 : 0.30731 : 77
Equation number 78 : 7.0851 : pH_tilde
Equation number 79 : -1.4479 : pF_tilde
Equation number 80 : 3.5884 : pH_tilde_s
Equation number 81 : 2.9319 : pF_tilde_s
Equation number 82 : -258396.1061 : Omega_H
Equation number 83 : -39620606.4456 : Omega_F
Equation number 84 : -5570019.2406 : Omega_H_s
Equation number 85 : -44249229475.6818 : Omega_F_s
Equation number 86 : -1326578019.0343 : Upsilon_H
Equation number 87 : -6592682393.8808 : Upsilon_F
Equation number 88 : -1936283493.8839 : Upsilon_F_s
Equation number 89 : -1870947004.5865 : Upsilon_H_s
Equation number 90 : 2.6967 : zeta_piH
Equation number 91 : 6.7288 : zeta_piF
Equation number 92 : 1.4701 : zeta_piH_s
Equation number 93 : -4.0991 : zeta_piF_s
Equation number 94 : 0 : 94
Equation number 95 : 0 : 95
Equation number 96 : 0.52967 : R_Lb
Equation number 97 : -1.5908 : R_Lb_s
Equation number 98 : -36.4921 : R
Equation number 99 : -0.10228 : l_b
Equation number 100 : -0.021843 : R_L_tilde
Equation number 101 : 6.3949 : R_L_tilde_s
Equation number 102 : -2.976728873910829e+33 : Omega_L
Equation number 103 : -3.55876087361847e+188 : Omega_L_s
Equation number 104 : -7.370176297193643e+34 : Upsilon_L
Equation number 105 : -5.666579860590807e+191 : Upsilon_L_s
Equation number 106 : 0 : 106
Equation number 107 : -0.76197 : 107
Equation number 108 : 8.0028 : dR
Equation number 109 : 6.7874 : dR_s
Equation number 110 : -0.39288 : m_chi
Equation number 111 : 0.96187 : m_chi_s
Equation number 112 : 8.4913 : dm_chi
Equation number 113 : 7.0605 : dm_chi_s
Equation number 114 : -0.31212 : ly
Equation number 115 : 7.2006 : ly_s
Equation number 116 : 2.1187 : t
Equation number 117 : 4.0181 : g
Equation number 118 : 6.7131 : t_s
Equation number 119 : 0.75967 : g_s
Equation number 120 : -4.9283 : p_g
Equation number 121 : -2.0163 : p_g_s
Equation number 122 : 2.1932 : gH
Equation number 123 : 1.3379 : gF
Equation number 124 : 6.0141 : gF_s
Equation number 125 : 8.5293 : gH_s
Equation number 126 : 17.7003 : 126
Equation number 127 : 0.53324 : 127
Equation number 128 : 5.9734 : 128
Equation number 129 : 2.6103 : 129
Equation number 130 : 6.8082 : 130
Equation number 131 : 2.6665 : 131
Equation number 132 : -349.2782 : 132
Equation number 133 : -203.2991 : 133
Equation number 134 : 1.0084 : Delta_H
Equation number 135 : -27.8444 : Delta_H_s
Equation number 136 : -4102.8427 : Delta_F
Equation number 137 : -273674041016.2521 : Delta_F_s
Equation number 138 : 5.3143 : 138
Equation number 139 : 8.0131 : l_b_s
Equation number 140 : 1.0665 : Delta_L
Equation number 141 : 0.84436 : Delta_L_s
Equation number 142 : 33.0988 : 142
Equation number 143 : 4.3615 : 143
Equation number 144 : 366.4696 : 144
Equation number 145 : -24.8878 : rho
Equation number 146 : -5.3524 : 146
Equation number 147 : 0.023992 : eps_u
Equation number 148 : 0.012332 : eps_chi
Equation number 149 : 0.091954 : eps_n
Equation number 150 : 0.11998 : eps_i_chi
Equation number 151 : 0.20863 : eps_z
Equation number 152 : 0.024827 : eps_g
Equation number 153 : 0.45136 : eps_tau_H
Equation number 154 : 0.47239 : eps_tau_F
Equation number 155 : 0.24543 : eps_tau_w
Equation number 156 : 2.9355 : eps_tau_L
Equation number 157 : 0.16886 : eps_rho
Equation number 158 : 6.353 : eps_R
Equation number 159 : 0.2876 : eps_m_chi
Equation number 160 : 0.02989 : eps_m_chi_s
Equation number 161 : 0.090005 : eps_u_s
Equation number 162 : 0.036925 : eps_chi_s
Equation number 163 : 0.055601 : eps_n_s
Equation number 164 : 0.39013 : eps_i_chi_s
Equation number 165 : 0.19487 : eps_z_s
Equation number 166 : 0.12085 : eps_g_s
Equation number 167 : 0.20196 : eps_tau_H_s
Equation number 168 : 0.048227 : eps_tau_F_s
Equation number 169 : 0.065987 : eps_tau_w_s
Equation number 170 : 5.6523 : eps_tau_L_s
Equation number 171 : -3.5116 : y_eur
Equation number 172 : -3.4905 : pic_eur
Equation number 173 : 3.2972 : c_eur
Equation number 174 : 1.861 : l_eur
Equation number 175 : 1.7868 : i_chi_eur
Equation number 176 : -5.6749 : p_chi_eur
Equation number 177 : 0.45917 : R_L_eur
Equation number 178 : -195.7659 : logc
Equation number 179 : -169.9943 : logi_chi
Equation number 180 : -205.2754 : logl
Equation number 181 : -41.3023 : logc_s
Equation number 182 : -167.1863 : logi_chi_s
Equation number 183 : 111.0867 : logl_s
Equation number 184 : -168.0944 : logc_eur
Equation number 185 : -197.0953 : logi_chi_eur
Equation number 186 : -102.3711 : logl_eur
Equation number 187 : -212.6866 : logy
Equation number 188 : -163.9582 : logy_s

Error using print_info (line 32)
Impossible to find the steady state (the sum of square residuals of the static equations is Inf). 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 steady (line 102)
print_info(info,options_.noprint, options_);

出错 macropru_euro.driver (line 1949)
steady;

Error dynare (line 293)
evalin(‘base’,[fname ‘.driver’]) ;

Could anyone offer me some idea of repairing the code?
Thanks for any advice!

Here is the code:
no301.mod (24.9 KB)

2

It seems you introduced nonlinear expressions into a linearized model. That seems wrong.

3

Does that means there are some nonlinear equations and linear equations mixed up?
Or I can change “model;” into “model(linear);” to solve this problem?
Thanks for your reply!

4

They are mixed up it seems. Or you are missing steady state file.

5

Thanks for your reply, Professor jpfeifer!
I get the steady state file now. There are something wrong in it, but I am not familiar with .m file.

Could you please offer me some idea of how to repair the code?
Thank you very much!

Error using macropru_euro_steadystate
输入参数太多。//(means: Too many input parameters)

Error evaluate_steady_state_file (line 49)
[ys,params1,check] = h_steadystate(ys_init, exo_ss,M,options);

Error evaluate_steady_state (line 210)
[ys,params,info] = evaluate_steady_state_file(ys_init,exo_ss,M, options,steadystate_check_flag);

Error steady_ (line 55)
[steady_state,params,info] = evaluate_steady_state(oo_.steady_state,M_,options_,oo_,~options_.steadystate.nocheck);

Error steady (line 80)
[oo_.steady_state,M_.params,info] = steady_(M_,options_,oo_);

Error macropru_euro.driver (line 1949)
steady;

Error dynare (line 293)
evalin(‘base’,[fname ‘.driver’]) ;

Here is the steady state file:
macropru_euro_steadystate.m (8.3 KB)

Again, best wishes to you!

6

This file is for old Dynare versions. See Code not working after updating Dynare to 4.6.0

7

Thanks for you help!
I cannot find any guidence of writting steady _state.m file in user guide for dynare. So I am still learning how to code steady_state.m file.
Now I try to run the code in dynare 4.5.7, but still has some problem in it:

Configuring Dynare …
[mex] Generalized QZ.
[mex] Sylvester equation solution.
[mex] Kronecker products.
[mex] Sparse kronecker products.
[mex] Local state space iteration (second order).
[mex] Bytecode evaluation.
[mex] k-order perturbation solver.
[mex] k-order solution simulation.
[mex] Quasi Monte-Carlo sequence (Sobol).
[mex] Markov Switching SBVAR.

Using 64-bit preprocessor
Starting Dynare (version 4.5.7).
Starting preprocessing of the model file …
Found 188 equation(s).
Evaluating expressions…done
Computing static model derivatives:

  • order 1
    Computing dynamic model derivatives:
  • order 1
    Processing outputs …
    done
    Preprocessing completed.

Equation solved.

fsolve completed because the vector of function values is near zero
as measured by the selected value of the function tolerance, and
the problem appears regular as measured by the gradient.

调用 “macropru_euro_steadystate” 时，未对输出参数 “params” (可能还包括其他参数)赋值。//// means:The output parameter “params” (and possibly other parameters) is not assigned when “macropru_euro_steadystate” is used.

Error evaluate_steady_state_file (line 52)
[ys,check] = h_steadystate(ys_init, exo_ss);

Error evaluate_steady_state (line 212)
[ys,params,info] = evaluate_steady_state_file(ys_init,exo_ss,M,
options,steadystate_check_flag);

Error steady_ (line 55)
[steady_state,params,info] =
evaluate_steady_state(oo_.steady_state,M_,options_,oo_,~options_.steadystate.nocheck);

Error steady (line 81)
[steady_state,M_.params,info] = steady_(M_,options_,oo_);

Error macropru_euro (line 1523)
steady;

Error dynare (line 235)
evalin(‘base’,fname) ;

//////////////////////////////////
Could you please offer me how to solve the problem?
Thank youu very much!

Here is the code:
macropru_euro.mod (25.0 KB)
macropru_euro_steadystate.m (8.7 KB)
solve_l_rk.m (1.6 KB)

8

Use the attached file with Dynare 5:
macropru_euro_steadystate.m (9.1 KB)
macropru_euro.mod (25.0 KB)

9

It works, thank you very much for your sincere reply, professor jpfeifer!
Forgive me for my slow reply, I was learn the code to understand how it works.