I am trying to solve the following equations using MCP.

Code: Select all

```
equations
production(t).. Y(t)=e=(kappa*[epsilon*K(t)**(1-1/sigma)+(1-epsilon)*L(t)**(1-1/sigma)]**[1/(1-1/sigma)])-(0.5*psi*(I(t)/K(t) -[n+g+n*g+delta])**(2) *K(t));
wage(t).. w(t)=e=((1-epsilon)*kappa*L(t)**(-1/sigma)*(epsilon*K(t)**(1-1/sigma)+(1-epsilon)*L(t)**(1-1/sigma))**(-1+(1/(1-1/sigma))))/(1+nu);
capital_cost_acc(t).. q(t+1)=e=1+(1-tau_f)*(psi*(I(t)/K(t)-[n+g+n*g+delta]));
capital_cost(t).. r*q(t)=e=(1-tau_f)*[(epsilon*K(t)**(-1/sigma)*kappa*(epsilon*K(t)**(1-1/sigma)+(1-epsilon)*L(t)**(1-1/sigma))**(-1+(1/(1-1/sigma))))-(0.5*psi*(I(t)/K(t) -[n+g+n*g+delta])**(2) *K(t) - psi*I(t)*(I(t)/K(t) -[n+g+n*g+delta])/K(t))+(1-delta)*(q(t)-q(t-1))-delta*q(t)];
capital_accumulation(t).. K(t+1)=e=[(1-delta)*K(t)+I(t)]/((1+n)*(1+g));
Investment(t).. I(t)=e=(n+g+n*g+delta)*K(t);
model pro /production.Y wage.w capital_cost_acc.L capital_cost.q capital_accumulation.K Investment.I/;
option mcp=path;
solve pro using mcp;
```

If I change capital_accumulation to K(t)=e=....K(t-1)+I(t). I get infeasible due to capital_cost_acc "Force Row Zero Infeasible.

Thanks for any help you may offer.