RBC model with fiscal policies

[MscK]

Dear all,

I am relative new to dynare, but I need to use if for my master dissertation. I am trying to program a model I found online. The problem is that my initial values are to far away from the steady state values. But I have calculated the steady states by hand and it should be right....

I know that as I am not using exponents, the output should be in level terms, but that should not matter that much for the running of the model should it?

Does anyone see the mistake that I made? Your help would be appreciated.

Attached is the mod.file and the pdf file of the model that I am trying to recreate (pages 1-8).

[zolnier]

Your model does not find the steady state because of

Code: Select all

a=rhoa*a(-1)+ea

Given the steady state values for a_ss = 1 and rhoa = 0.97 the LHS does not equal the RHS.

You need to specify this specific process in terms of logarithms with the way you have entered the model for the steady state to be found.

A friendly suggestion is to add the option

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resid;

to the code to display the residuals of each equation. This will then show you which equation is causing problems.

[MscK]

Thank you! it's running now! Also thanks for the suggestion