(basic) Iacoviello 2015, converging problem

[Thea]

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!

[federico]

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

[jpfeifer]

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