Dynare forums

Attached is a very simple mod file in Dynare. and we can calculate the steady state value of capital as

K=((1/beta-(1-delta))/alpha)^(1/(alpha-1));

Then compare this solution with the one dynare gives out, please notice that dynare gives out log(K) since I use a log-linearized version in dynare

It looks the solution from dynare is as big as 4 times of the right solution, or I made a mistake in the mod file.

The Euler equation should be

exp(lam)=beta*exp(lam(+1))*((1-delta)+alpha*exp(a(+1)+(alpha-1)*k));

instead of

exp(lam)=beta*(exp(lam(+1))*(1-delta)+alpha*exp(a(+1)+(alpha-1)*k));

Best

Michel