B-K conditions:no stable equilibrium

Dear Professor Feiter,

I have met some troubles in B-K conditions. It is said not satisfied the B-K conditions:no stable equilibrium.I have tried to change the timing and also check the equations.But the error still exists.So I write this to ask for help.Thank you very much for help! I have added the mod file below.
桑迪mod.txt (12.6 KB)

error use in print_info (line 42)
Blanchard Kahn conditions are not satisfied: no stable equilibrium

error stoch_simul (line 100)
print_info(info, options_.noprint, options_);

error PHQ5new (line 314)
info = stoch_simul(var_list_);

error dynare (line 235)
evalin(‘base’,fname) ;

The file you posted is not a mod-file.

Dear Professor Pfeiter,
Sorry I have added the txt file and here is the mod file.
sandy.mod (2.1 KB)
Thank you very much!

  1. MODEL_DIAGNOSTICS: The following endogenous variables aren’t present at the current period in the model:

  2. Why is your Euler equation backward-looking?

Dear Professor Pfeiter,

Thank you for your reply!

For the item 2, could you please tell me how to transform the backward-looking into the forward-looking? And I have another question. Why we need to get the FOC of K(+1) and B(+1) rather than K and B? K is the capital and B is the debt. I found that there are many books written like this. Could you please tell me the reason? Thank you very much!

  1. I was just wondering whether the equation is indeed correct.
  2. Part of the problem may indeed have to do with the timing of your states. You already seem to have an end of the period stock notation. In that case, the derivative is with respect to K. Many papers instead use a beginning of the period stock notation. Only in those case the derivative is with respect to K(+1). Note that Dynare requires the end of the period stock notation or alternatively a predetermined_variables-statement to that effect.

Dear Professor Pfeiter,

Thank you for your explanation.

The equation does have something wrong. I have deleted the redundant variables , tried to adjust the time of capital variables and rewrite the code.The new mod file is added below. But it is said ‘Impossible to find the steady state. Either the model doesn’t have a steady state, there are an infinity of steady states, or the guess values are too far from the solution’.

I wonder how this is happening. The steady state values I have got through the using of ‘fsolve’ in matlab. Is it because the steady state value is obtained Inappropriately ,or the logic of the model itself, or the setting of the parameters? Hope your reply! Thank you very much!

Best regards,
Di Sang.
PHQ6ss.mod (2.8 KB)

It means the entered model equations are inconsistent with the ones you used with fsolve. So there must be a mistake somewhere. Also note that it is always recommended to first solve the model without exp-substitution and only substitute once the model works.

Received. Thank you professor!