# Bayesian Estimation: Blanchard Kahn conditions are not satisfied: no stable equi

**URL:** <https://forum.dynare.org/t/bayesian-estimation-blanchard-kahn-conditions-are-not-satisfied-no-stable-equi/15730>\
**Category:** ML/Bayesian estimation\
**Created:** [3 May 2020 14:25 UTC](https://forum.dynare.org/t/bayesian-estimation-blanchard-kahn-conditions-are-not-satisfied-no-stable-equi/15730 "2020-05-03T14:25:40Z")\
**Posts on this page:** 4\
**Page:** 1

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**Author:** ![azeem](https://forum.dynare.org/letter_avatar_proxy/v4/letter/a/43a26b/32.png) [@azeem](https://forum.dynare.org/u/azeem)\
**Post date:** [3 May 2020 14:25 UTC](https://forum.dynare.org/t/bayesian-estimation-blanchard-kahn-conditions-are-not-satisfied-no-stable-equi/15730/1 "2020-05-03T14:25:40Z")

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Dear Professor Pfeifer

I have recently started attempting to perform Bayesian Estimation. On one of the estimation attempts I encountered the following error:

Error in computing likelihood for initial parameter values

ESTIMATION\_CHECKS: There was an error in computing the likelihood for initial parameter values.  
ESTIMATION\_CHECKS: If this is not a problem with the setting of options (check the error message below),  
ESTIMATION\_CHECKS: you should try using the calibrated version of the model as starting values. To do  
ESTIMATION\_CHECKS: this, add an empty estimated\_params\_init-block with use\_calibration option immediately before the estimation  
ESTIMATION\_CHECKS: command (and after the estimated\_params-block so that it does not get overwritten):

Error using print\_info (line 42)  
Blanchard Kahn conditions are not satisfied: no stable equilibrium

Error in print\_info (line 42)  
error([‘Blanchard Kahn conditions are not satisfied: no stable’ …

Error in initial\_estimation\_checks (line 175)  
print\_info(info, DynareOptions.noprint, DynareOptions)

Error in dynare\_estimation\_1 (line 165)  
oo\_ =  
initial\_estimation\_checks(objective\_function,xparam1,dataset\_,dataset\_info,M\_,estim\_params\_,options\_,bayestopt\_,bounds,oo\_);

Error in dynare\_estimation (line 105)  
dynare\_estimation\_1(var\_list,dname);

Error in FFestimation (line 343)  
oo\_recursive\_=dynare\_estimation(var\_list\_);

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

> >

I have following this error included an empty estimated\_params\_init(use\_calibration); block yet the problem persist. What would be your suggestion for me to overcome this problem? Looking forward to hear from you.

Best regards  
Azeem [FFestimation.mod](https://forum.dynare.org/uploads/short-url/c0Tv5gh98JRHQinPRWr3IgjidLp.mod) (4.6 KB) [Consumption.csv](https://forum.dynare.org/uploads/short-url/dD29NFGlamWDr76ugEVzyFCkqws.csv) (7.4 KB)

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [4 May 2020 09:22 UTC](https://forum.dynare.org/t/bayesian-estimation-blanchard-kahn-conditions-are-not-satisfied-no-stable-equi/15730/2 "2020-05-04T09:22:42Z")

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> [@Schmitt-Grohe & Uribe (2018) replication](https://forum.dynare.org/t/schmitt-grohe-uribe-2018-replication/13832/6):
>
> Your model has a unit root. You need to use diffuse\_filter in estimation

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**Author:** ![azeem](https://forum.dynare.org/letter_avatar_proxy/v4/letter/a/43a26b/32.png) [@azeem](https://forum.dynare.org/u/azeem)\
**Post date:** [14 May 2020 12:35 UTC](https://forum.dynare.org/t/bayesian-estimation-blanchard-kahn-conditions-are-not-satisfied-no-stable-equi/15730/3 "2020-05-14T12:35:32Z")

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Dear Professor Pfeifer

Thanks for that. I have used diffuse\_filter in estimation and it works. However my problem currently is that following estimation, computation of IRFs at posterior mode/means does not work. It comes with the following error:

Error using print\_info (line 42)  
Blanchard Kahn conditions are not satisfied: no stable equilibrium

Error in stoch\_simul (line 100)  
print\_info(info, options\_.noprint, options\_);

Error in FFestimation (line 355)  
info = stoch\_simul(var\_list\_);

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

I am wondering what is the issue now. The calibrated model works fine but with updated values it appears some problem is there that I cannot identify. Any suggestion or comments would be much appreciated.

Best regards  
Azeem [Consumption.csv](https://forum.dynare.org/uploads/short-url/9r8RT6JX1yJtUj9xAWHtZJRojJb.csv) (7.7 KB) [FFestimation.mod](https://forum.dynare.org/uploads/short-url/5EXnjv77LOSBruCNhvoX4TIPPnp.mod) (4.9 KB)

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [15 May 2020 18:44 UTC](https://forum.dynare.org/t/bayesian-estimation-blanchard-kahn-conditions-are-not-satisfied-no-stable-equi/15730/4 "2020-05-15T18:44:18Z")

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From what I can see, you are matching detrended data to non-mean zero variables in the model. Thus, your observation equations are wrong.

> [@Bringing model to the data](https://forum.dynare.org/t/bringing-model-to-the-data/11390/2):
>
> Please first read [Pfeifer(2013): “A Guide to Specifying Observation Equations for the Estimation of DSGE Models”](https://drive.google.com/file/d/1r89OU5OE3CBa6tOlj6l3hNVWEaRH5Anv/view?usp=sharing)