Dynare forums

Dear,

I need the help to find some error.

The error is that initial vaule is not incompatible with equations.

I am trying to figure it out. But still do not get it.

Thank you.

The error message results from division by 0. As you did not specify an initval-block, all variables are initialized to 0.

Moreover, you FOCs are most probably wrong. Consider for example the term in the second model equation:

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(phi_c+PSI/(v/(1-rho_lambda^2)))

In the non-stochastic steady state, PSI and v are both 0. Hence, in the steady state computation,

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PSI/(v/(1-rho_lambda^2))

results in a division of 0 by 0. This gives you the error message for equation 2.