Dynare forums

Hello everybody,

We are now planning to pelicate the basic model of Iacoviello 2015.

Unfortunately our code does not work, neither the code provided by Iacoviello himself.

We always have a converging problem.
Error using steady_ (line 27)
STEADY: convergence problems
...

As we are totally beginners with dynare, there might be some dumb mistakes.
Note: we took the same initial values as in our replication of a simpler Version of Iacoviello's 2005 paper, which worked.

We are grateful forany help!

Are you talking about the paper
"Financial Business Cycle" ?

The usual advice applies. Try computing the steady state analytically. Or try starting with a simple version that works.