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I am attempting to model capital-skills complementarity and inequality over the business cycle, emulating results obtained by Lindquist (2004). However, I am experiencing some difficulty doing so. The problem is describe by the following error code...

SOLVE: Iteration 18
Spurious convergence.
-1.1102
0.0137
0.2746
0.7627
-2.2564
0.0381
-3.0609
0.0165
-0.3860
-0.0403
1.3985
0.8129
0.1485

??? Error using ==> steady_ at 132
STEADY: convergence problems

Error in ==> steady at 52
steady_;

Error in ==> lindquistsim at 195
steady;


find attached the relevant *.mod file. Any help would be greatly appreciated.

Thanks,
Alex

Come to think of it, I imagine I've misspecified various elements within the model which may be causing this 'spurious convergence'. This is my first real stab at simulating models using DYNARE so any general guidance would still be greatly appreciated. I do realize that my initial question could probably be resolved by greater mathematical rigour on my part.