Bk condition isn't satisfied but determinitic simulation works

Perfect foresight simulations
1

Dear professor Pfeiffer,
In a determinitic model, bk condition isn’t satisfied but simulation works. What does it mean? And why?
Thank you for your time.
Kind regards,
Leo

2

That is hard to say in general. But for example, if there is indeterminacy, then the deterministic simulation may return one of the infinitely many solutions. Note also that the BK conditions are only locally valid.

3

Thank you for your prompt reply. So this doesn’t mean the model is wrong or the results are not reliable?
Kind regards,
Leo

4

I can’t really tell. All I am saying is that there are models where this outcome is expected although the model is correct. But it means that usual perfect foresight solutions will not work