Ask for help:Blanchard & Kahn conditions are not satisfied: indeterminacys

Hi, I make up a dsge model consisting of financial markets. the results said “Blanchard & Kahn conditions are not satisfied: indeterminacy.”

I check the model, it said “There are 20 eigenvalue(s) larger than 1 in modulus
for 23 forward-looking variable(s)”

I then checked carefully the timing issue and find no errors about that. could you please help me to solve this problem?

I upload the model file and also post here.
model.m (6.2 KB)

%%%%%%%%%%%%%% Lender Households %%%%%%%%%%%%%%

% (1) Euler Equation for consumption

exp(laml)=1/exp(Cl);

% (2) Euler equation for debt

exp(laml)=betal*exp(laml(+1))*exp(R)/exp(infl(+1));

% (3) Euler equation for housing

exp(laml)exp(qh)-gammah/exp(Hl)=betalexp(laml(+1))*exp(qh(+1));

% (4) labor supply

-Phiexp(etaLl)+exp(laml)*exp(w)=0;

%%%%%%%%%%%%%%% Borrowers %%%%%%%%%%%%%%%%%%

% (5) Budget

%exp(Cb)+exp(b(-1))/exp(infl)+exp(qh)(exp(Hb)-exp(Hb(-1)))=exp(w)exp(Lb)+exp(Qb)(exp(b)-kappaexp(b(-1))/exp(infl));

% (5) Borrowing budget

exp(Qb)(exp(b)-kappaexp(b(-1))/exp(infl))=xi*exp(qh)*exp(Hb);

% (6) Euler equation for consumption

1/exp(Cb)-exp(lam1)=0;

% (7) Euler equation for housing

gammah/exp(Hb)-exp(lam1)exp(qh)+betabexp(lam1(+1))exp(qh(+1))+xiexp(lam2)*exp(qh)=0;

% (8) lam1 and lam2

(exp(lam1)-exp(lam2))exp(Qb)+betab/exp(infl(+1))(kappaexp(lam2(+1))exp(Qb(+1))-exp(lam1(+1))(1+kappaexp(Qb(+1))))=0;

% (9) Labor supply

-Phiexp(etaLb)+exp(lam1)*exp(w)=0;

%%%%%%%%%%%%%%%%%%%%% Financial Market %%%%%%%%%%%%%%%%%%%%%

% (10) Rf

exp(Rf)=(1+kappa*exp(Qf))/exp(Qf(-1));

% (11) Rb

exp(Rb)=(1+kappa*exp(Qb))/exp(Qb(-1));

% (12) Budget

exp(Qb)*exp(b)+exp(Qf)*exp(f)=exp(d)+exp(n)+exp(s)*exp(hm);

% (13) n

exp(n)=sigma/exp(infl)*((exp(Rf)-exp(R(-1)))*exp(Qf(-1))*exp(f(-1))+(exp(Rb)-exp(R(-1)))*exp(Qb(-1))*exp(b(-1))+exp(R(-1))*exp(n(-1))-exp(Rhm(-1))*exp(s(-1))*exp(hm(-1)))+M;

% (14) Rhm

exp(Rhm)=exp(R)exp(-zeta/hmsexp(s)*exp(hm));

% (15) Lam

exp(Lam)=betal*exp(laml)/exp(laml(-1));

% (16) Omega

exp(Omega)=1-sigma+sigmathetaexp(phi);

% (17)

exp(Lam(+1))exp(Omega(+1))/exp(infl(+1))(exp(Rf(+1))-exp(R))=exp(lam)/(1+exp(lam))*theta;

% (18)

exp(Lam(+1))exp(Omega(+1))/exp(infl(+1))(exp(Rb(+1))-exp(R))=exp(lam)/(1+exp(lam))thetaDelta;

% (19)

exp(Qf)exp(f)+Deltaexp(Qb)*exp(b)=exp(phi)*exp(n);

% (20)

%theta*exp(phi)=exp(Lam(+1))exp(Omega(+1))/exp(infl(+1))(exp(R)*exp(n)-exp(Rhm(-1))*exp(s(-1))*exp(hm(-1)));

exp(phi)=(exp(R)*exp(Lam(+1))*exp(Omega(+1))/exp(infl(+1))) / (theta-(exp(Rf(+1))-exp(R))*exp(Lam(+1))*exp(Omega(+1))/exp(infl(+1)));

%%%%%%%%%%%%%%%%% Final Product Producer %%%%%%%%%%%%%%%

% (21) Production function

exp(Y)=exp(YhH*gamma)*exp((1-gamma)*YF);

% (22)

exp(YhH)/exp(YF)=gamma/(1-gamma);

% (23) Domestic tradable goods

exp(YH)=exp(YhH)+exp(EX);

% (24) Final goods price

1=(exp(pH)/gamma)^gamma*(exp(pF)/(1-gamma))^(1-gamma);

%%%%%%%%%%%%%%% Intermediate goods%%%%%%%%%%%%%%

% (25) Production function

exp(Ym)=exp(A)exp(alpha(K(-1)))*exp((1-alpha)*L);

% (26) Investment budget

exp(I)=exp(Qf)(exp(f)-kappaexp(f(-1))/exp(infl));

% (27) Capital evolvment

exp(K)=(1-delta)exp(K(-1))+exp(I)(1-kappaI/2*(exp(I)/exp(I(-1))-1)^2);

% (28) FOC for L

(1-alpha)*exp(pm)*exp(A)exp(alphaK(-1))exp(-alphaL)=exp(w);

% (29) FOC for K

exp(Lam(+1))(alphaexp(pm(+1))*exp(A(+1))*exp((alpha-1)*K)*exp((1-alpha)L(+1))+exp(theta2(+1))(1-delta))=exp(theta2);

% (30) FOC for I

-(1+exp(theta1))+exp(theta2)(1-kappaI/2(exp(I)/exp(I(-1))-1)^2-kappaI*(exp(I)/exp(I(-1))-1)(exp(I)/exp(I(-1))))+kappaIexp(Lam(+1))exp(theta2(+1))(exp(I(+1))/exp(I)-1)*(exp(I(+1))/exp(I))^2=0;

% (31) FOC for f

exp(Qf)(1+exp(theta1))-exp(Lam(+1))/exp(infl(+1))(1+kappaexp(Qf(+1))(1+exp(theta1)))=0;

%%%%%%%%%%%%%%%%%%%%%%%%% Retailer %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

% (32) x1

exp(x1)=(exp(pHr)/exp(pH))^(1-epsilon)exp(YH)+PhipinflH^(1-epsilon)exp(Lam(+1))(exp(pHr)/exp(pH(+1)))^(1-epsilon)*exp(x1(+1));

% (33) x2

exp(x2)=(exp(pHr)/exp(pH))^(-epsilon)*exp(pm)/exp(pH)exp(YH)+PhipinflH^(-epsilon)exp(Lam(+1))(exp(pHr)/exp(pH(+1)))^(-epsilon)*exp(x2(+1));

% (34) x1/x2

exp(x1)/exp(x2)=epsilon/(epsilon-1);

% (35) pHstar/pH

exp((1-epsilon)*pH)=(1-Phip)*exp((1-epsilon)pHr)+PhipinflH^(1-epsilon)*exp((1-epsilon)*pH(-1));

% (36) Ym/YH

exp(Ym)=exp(vp)*exp(YH);

% (37) vp

exp(vp)=(1-Phip)(exp(pHr)/exp(pH))^(-epsilon)+Phip(exp(pH(-1))*inflH/exp(pH))^(-epsilon)*exp(vp(-1));

%%%%%%%%%%%%%%%%%%%%%% Retailers for foreign tradable %%%%%%%%%%%%%%%%%

% (38) x1r

exp(x1r)=(exp(pFr)/exp(pF))^(1-epsilon)exp(YF)+PhipinflF^(1-epsilon)exp(Lam(+1))(exp(pFr)/exp(pF(+1)))^(1-epsilon)*exp(x1r(+1));

% (39)x2r

exp(x2r)=(exp(pFr)/exp(pF))^(-epsilon)*exp(pmF)/exp(pF)*exp(YF)+

Phip*inflF^(-epsilon)exp(Lam(+1))(exp(pFr)/exp(pF(+1)))^(-epsilon)*exp(x2r);

% (40) x1r/x2r

exp(x1r)/exp(x2r)=epsilon/(epsilon-1);

% (41) pFstar/pF

exp((1-epsilon)pF)=Phip(exp(pF(-1))*inflF)^(1-epsilon)+(1-Phip)*exp((1-epsilon)*pFr);

% (42) Ym/YF

exp(YmF)=exp(vpr)*exp(YF);

% (43) vpr

exp(vpr)=(1-Phip)(exp(pFr)/exp(pF))^(-epsilon)+Phip(exp(pF(-1))*inflF/exp(pF))^(-epsilon)*exp(vpr(-1));

%%%%%%%%%%%%%%%% Monetary Policy %%%%%%%%%%%%%%%%%

% (44) R

R=rhorR(-1)+(1-rhor)(log(Rs)+rhopi*(infl-log(Pis))+rhoY*(Y-log(Ys)))+eR;

%%%%%%%%%%%%%%%%%% Current account %%%%%%%%%%%%%%%%%%%

% (45) PmF

exp(pmF)=exp(s);

% (46) EX

exp(EX)=(exp(pH)/exp(s))^(-v)*exp(X);

% (47) X

X=(1-rhoX)log(Xs)+rhoXX(-1)+eX;

%%%%%%%%%%%%%%%%% Capital account%%%%%%%%%%%%%%%%%

% (48) hm

exp(hm)=hms*(exp(s)*exp(R)/(exp(s(+1))exp(Rr)))^v1(exp(Y(+1))/exp(Y))^v2;

% (49) Rr

Rr=(1-rhoRr)log(Rrs)+rhoRrRr(-1)+eRr;

%%%%%%%%%%%%%%%%%% Clearing conditions %%%%%%%%%%%%%%%%%%%%%%

% (50) Final goods clearing

exp(Y)=exp(Cl)+exp(Cb)+exp(I);

% (51) Housing clearing

exp(Hl)+exp(Hb)=1;

% (52) Labor market clearing

exp(Ll)+exp(Lb)=exp(L);

% (53) International budget

exp(EX)-exp(pmF)*exp(YmF)-exp(Rhm(-1))*exp(s)exp(hm(-1))=-exp(s)(exp(hm)-exp(hm(-1)));

% (54) Exchange rate policy

ln(exp(s)/ss)=rhos*ln( (exp(EX)-exp(pmF)exp(YmF)) / (EXs-pmFsYmFs))+es;

% (55) A

A=rhoA*A(-1)+eA;

end;

%options_.noprint=1;

steady;

shocks;

var eA=1;

var eR=1;

var eRr=1;

var eX=1;

var es=1;

end;

stoch_simul(order=1,irf=50,nograph,ar=0,qz_zero_threshold=1e-8) qh Y;

You did not provide the parameter file you are loading.

hi professor, these are parameters. I am uploading it also.
param_save.m (800 Bytes)

function param_save(zeta)

betab=0.95;

betal=0.995;

gammah=1/3;

eta=2;

kappa=1-1/40;

xi=0.15;

zeta=0.015;

%theta=0.8;

Delta=0.5;

gamma=0.7;

kappaI=2;

alpha=2/3;

delta=0.1;

epsilon=11;

Phip=0.6;

inflH=1;

inflF=1;

Pis=1.02;

v=1;

fracYH=0.4;

v1=0.25;

v2=0.25;

sp=0.04;

As=1;

sigma=0.85;

levs=4;

fracCl=0.5;

% Monetary policy rule

rhor=0.9;

rhopi=1.5;

rhoY=0.125;

% shock parameters

rhoX=0.9;

rhoRr=0.9;

rhoA = 0.95;

rhos=0.9;

eR=0.01;

eX=0.01;

eA=0.065;

eRr=eR;

es=0.01;

if nargin < 2

zeta=0.015;

end

save param betab betal gammah eta kappa xi zeta Delta gamma kappaI alpha…

delta epsilon Phip inflH inflF Pis v rhoX fracYH v1 v2 sp rhoRr rhor rhopi rhoY…

rhoA eR eX eA eRr As sigma levs fracCl rhos es
model_ss.m (1.9 KB)
param_ss.m (2.6 KB)

You are not using a proper steady state file. I am not getting a steady state.

model_steadystate.m (657 Bytes)

hi professor, I am uploading steady state file. And this is result I get:

dynare model
Using 64-bit preprocessor
Starting Dynare (version 4.6.3).
Calling Dynare with arguments: none
Starting preprocessing of the model file …
Found 55 equation(s).
Evaluating expressions…done
Computing static model derivatives (order 1).
Computing dynamic model derivatives (order 1).
Processing outputs …
done
Preprocessing completed.

STEADY-STATE RESULTS:

Cl -0.865745
Hl -0.564527
Ll -0.282052
laml 0.865745
Cb -0.865745
Hb -0.840787
b 1.62401
Lb -0.282052
lam1 0.865745
lam2 -0.374223
Rf 0.0630928
Rb 0.0441371
Rhm 0.00981517
Lam -0.00501254
Omega 0.659188
n 2.99125
f -0.419352
d 4.08392
lam -2.4629
phi 0.78079
Qb 2.65747
Y 0.151276
YhH 0.405465
pH -0.913511
Ym 0.916291
theta1 -0.225653
theta2 0.586672
L 0.411095
K 1.16889
I -1.1337
pHr -0.913511
pm -1.00882
YH 0.916291
x1 1.82511
x2 1.7298
vp 0
pFr 0.0953102
pF 0.0953102
YF -0.441833
x1r 0.466986
x2r 0.371676
vpr 0
R 0.0248152
pmF 0
EX 0
X -0.913511
YmF -0.441833
hm -1.03943
Rr 0.0248152
infl 0.0198026
w -1.60224
qh 3.89849
Qf 2.40655
s 0
A 0

I cannot spot anything immediately suspicious, so