Hi,
I am very new to DSGE modeling. I am playing with DSGE modeling which involves making 4 changes to the original codes. After the changes are made, I get the following error:
> There are 10 eigenvalue(s) larger than 1 in modulus
> for 11 forward-looking variable(s)
>
> The rank condition ISN'T verified!
>
> Error using print_info (line 45)
> Blanchard Kahn conditions are not satisfied: indeterminacy
I have seen similar problems posted here. The common answer to the problem is that there is some problem with the timing of the variables. Therefore, I am attaching both the original and the modified mod file here. I will be grateful if could help me identify which variables’ timings need to be rectified here. In the modified mod file I have written “Changed” without the quotation wherever I made changes to the original codes.
Ch7.mod (7.3 KB)
Ch7_modified.mod (7.3 KB)
Thank you in advance.
TR