Blanchard and Kahn are not satisfied

General DSGE Modeling
1

Hi, i’m writing a linear nek model in dynare but when i try to run it i get the following error message: “The rank condition ISN’T verified!
Blanchard & Kahn conditions are not satisfied: indeterminacy”
What is the error? can someone help me? Thanks in advance.

nek.mod (1.8 KB)

2

Most often it’s a timing error or a mistake in closing the model.

3

Thanks for the reply. Should I try to change the steady state parameters?

4

You can try that, but it’s rather unlikely to be caused by parameter values alone, given that you are missing two unstable eigenvalues.

5

Thanks. Do you know what are the problematic equations (if any)? I don’t understand what is the erroe in the equations.

6

As I said, most often there is a timing error somewhere (or a fundamental problem in closing the model). Unfortunately, that is not easy to debug.

7

What does timing error mean? i’m new in dynare.

8

For example, having a predetermined variable like capital coded as k instead of k(-1).

9

Thanks so much.