Replicating a paper from JEDC

[Broderick]

Dear forum members,

I'm trying to replicate a version of the model contained in this paper:
http://www.sciencedirect.com/science/article/pii/S0165188914000797

Dynare can't find the correct steady state, despite the fact that the code contains a steady state block
(Error using print_info (line 72). The steadystate file did not compute the steady state)

I thought I had made a mistake somewhere but I carefully checked my equations and steady state conditions. If somebody could help me understand what I'm doing wrong, I'd be most grateful.
I attach the .mod file and a pdf with SS conditions. In the code, I also "flag" the various model equations using the numbers in the paper.

Kind regards,

[jpfeifer]

In the steady_state_model-block in

Code: Select all

lambda=(1-v*b)/(c*(1-v));

it should be

Code: Select all

1-v*beta

, not

Code: Select all

1-v*b

to conform to the model block

[Broderick]

Dear prof. Pfeifer,

thank you very much for your help. If I correct the mistake you point out, the situation improves but I still get error messages. Is this just a numerical "quirk" that I'll need to override (how?) or is it a flag of substantial problems remaining?

(More in detail: Matlab/Dynare still say that Dynare is not computing the steady state, but the 2 non-zero residuals in the system look very small.)

Thanks again and best regards,

[jpfeifer]

Your model does not seem to have strong nonlinearities in the steady state computation. Therefore, pure numerical problems are highly unlikely. An analytical steady state should solve the model with residuals in the range of 10^10 or so. This suggests that there is either still a mistake in your steady state computation or the associated model equations.