Steady State convergence problem

[yuanxc90]

Hi,

I met a problem in running my mod file. It shows as below:

??? Error using ==> steady_ at 132
STEADY: convergence problems

Error in ==> steady at 54
steady_;

Error in ==> grow at 217
steady;

Error in ==> dynare at 120
evalin('base',fname) ;

I solved the steady state by pencil and paper, and checked it twice. However, there is always cnvergence problem. How can I solve it?

Thanks!

grow.mod

(2.81 KiB) Downloaded 204 times

[bkjecn]

If you mean your initvals to be the steady state values, those values do not solve the steady state version of the model. This can be most easily seen by looking at the final equation: 'afg' has a steady state of -0.001833751, but the value you give is different. The residuals to the equations (meaning by how much the equations are not equalities with those values) are:

Residuals of the static equations:

Equation number 1 : 3.1704e-06
Equation number 2 : -1.22e-06
Equation number 3 : -8.6188e-06
Equation number 4 : -0.97776
Equation number 5 : -0.97776
Equation number 6 : 0.00018642
Equation number 7 : 6.5734e-05
Equation number 8 : -3.9742e-05
Equation number 9 : 0
Equation number 10 : 0
Equation number 11 : 0
Equation number 12 : 0
Equation number 13 : 0
Equation number 14 : 0
Equation number 15 : 1.0535
Equation number 16 : 1.0535
Equation number 17 : -0.12216
Equation number 18 : 0.0004858
Equation number 19 : -0.017066
Equation number 20 : -0.026411
Equation number 21 : 0.037134
Equation number 22 : -0.0012671
Equation number 23 : -0.18229
Equation number 24 : 1.0941

[yuanxc90]

Thank you so much! Actually I just need to use the value of "afg/ag", the value is a constant, so I set “ag” to be 1, and “afg” to be another value in order to make the steady state value of afg/ag a constant. I am so sorry but where can I see the real steady state value? I didn't see any "-0.001833751" in the static file or anywhere else.

If you mean your initvals to be the steady state values, those values do not solve the steady state version of the model. This can be most easily seen by looking at the final equation: 'afg' has a steady state of -0.001833751, but the value you give is different. The residuals to the equations (meaning by how much the equations are not equalities with those values) are:

Residuals of the static equations:

Equation number 1 : 3.1704e-06
Equation number 2 : -1.22e-06
Equation number 3 : -8.6188e-06
Equation number 4 : -0.97776
Equation number 5 : -0.97776
Equation number 6 : 0.00018642
Equation number 7 : 6.5734e-05
Equation number 8 : -3.9742e-05
Equation number 9 : 0
Equation number 10 : 0
Equation number 11 : 0
Equation number 12 : 0
Equation number 13 : 0
Equation number 14 : 0
Equation number 15 : 1.0535
Equation number 16 : 1.0535
Equation number 17 : -0.12216
Equation number 18 : 0.0004858
Equation number 19 : -0.017066
Equation number 20 : -0.026411
Equation number 21 : 0.037134
Equation number 22 : -0.0012671
Equation number 23 : -0.18229
Equation number 24 : 1.0941

[bkjecn]

I calculated it by hand from your mod file. The equation is

afg=-0.0019011-0.0367276*afg(-1)+e8;

where e8 is a mean zero shock. So, in steady state,
afg + 0.0367276*afg = -0.0019011

which means afg = -0.001833751