Impossible to find the steady state

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Impossible to find the steady state

Postby stavakoli » Sun Nov 27, 2016 12:10 pm

Hi everybody
I'm very beginner in Dynare and I'm trying to estimate a small-open-economy RBC model for an oil exporting country with two policy: with and without an oil fund.
Codes are in attachment
My problem is about steady states when I use second policy. I'm pretty sure I have correctly solved the SS equations although still have errors so clearly have a mistake somewhere. Also Residuals of the static equations are not zero.
What is the problem? And what is the diffrence between initial values and steady states. I gave these two values equal.
Any suggestions?

Thanks
Attachments
Policyb.mod
(1.11 KiB) Downloaded 163 times
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Re: Impossible to find the steady state

Postby jpfeifer » Mon Nov 28, 2016 8:04 pm

I can only give you the advice to try to derive the steady state analytically with pencil and paper. When doing so, you might find out where the problem is.
------------
Johannes Pfeifer
University of Cologne
https://sites.google.com/site/pfeiferecon/
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Re: Impossible to find the steady state

Postby stavakoli » Tue Nov 29, 2016 7:31 am

jpfeifer wrote:I can only give you the advice to try to derive the steady state analytically with pencil and paper. When doing so, you might find out where the problem is.

Actually I did it several times and there is no problem on the paper.
I don't understand where is the problem.
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Re: Impossible to find the steady state

Postby stavakoli » Tue Nov 29, 2016 7:33 am

And what is the diffrence between initial values and steady states. I gave these two values equal
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Re: Impossible to find the steady state

Postby jpfeifer » Tue Nov 29, 2016 10:35 am

1. In that case, you need to find out why your entered equations and your manually computed steady state do not match. At least one of the two must still be wrong. The resid-command tells you which equations are not solved, given the values you provide. Focus on those.
2. Initial values are the starting values for a numerical solver that tries to find the steady state. Steady state values are analytical values that solve the equations without running a solver.
------------
Johannes Pfeifer
University of Cologne
https://sites.google.com/site/pfeiferecon/
jpfeifer
 
Posts: 6940
Joined: Sun Feb 21, 2010 4:02 pm
Location: Cologne, Germany

Re: Impossible to find the steady state

Postby stavakoli » Tue Nov 29, 2016 1:30 pm

Thank you very much Johannes.
I found the mistake and I solve the model correctly but still residuals are not zero but very small.

Is there any problem or not?
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Re: Impossible to find the steady state

Postby jpfeifer » Tue Nov 29, 2016 9:01 pm

Anything below 1e-6 is no reason to worry.
------------
Johannes Pfeifer
University of Cologne
https://sites.google.com/site/pfeiferecon/
jpfeifer
 
Posts: 6940
Joined: Sun Feb 21, 2010 4:02 pm
Location: Cologne, Germany


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