When I run mod file with Talyor ruler:
R=1/betta*(Y/steady_state(Y))^phi_y*(Pi/steady_state(Pi))^phi_pi;
- When I set
phi_y=0.125
phi_pi=1.5
, Dynare report:
Blanchard & Kahn conditions are not satisfied: no stable equilibrium.
- When I set
phi_y=0.25
phi_pi=1.5
, Dynare report:
Blanchard & Kahn conditions are not satisfied: indeterminacy.
- When I set
phi_y=0.01
phi_pi=1.5
, Dynare can run.
But the value ofphi_y
is so tiny, so where the wrong from? and how should I correct my model?