About deterministic transition

Dear all,
when I do the deterministic transition problem, the transition path is just around the steady state, whatever the initial values are. Even the initial value is zero, the figure is still the same.

Could you help me? Thanks in advance.

AB1.mod (4.4 KB)

There is no command in your file to run any simulation. In any case, your model does not satisfy the BK conditions. It is explosive. That will be a problem.

Dear professor jpfeifer,

I am very happy to receive your reply!

I am sorry I’m not professional. I upload the dynare code again.

As you have mentioned, the BK condition is not satisfied. I have tried to find solutions in the forum. Your suggestion is to check the timing problem. I check it again and again, but the error is always “There are 6 eigenvalue(s) larger than 1 in modulus
for 5 forward-looking variable(s)”.

I spend a lot of time solving this problem. Sometimes if I change some parameters, the BK condition is satisfied. But mostly, it is not satisfied. I have three state variables (kt, ht, xt), and three multipliers (lamt, pt, qt). So, what’s the difference between state variable, co-state variable and forward-looking variable?

Thank you very much, professor.

YuanAB1.mod (4.0 KB)

I can only recommend rechecking the model equations and the timing in particular. Maybe simplify your model.

Thank you very much, professor.