Blanchard Kahn conditions are not satisfied: indeterminacy due to rank failure

Stochastic simulations
1

Dear all,
I designed a DSGE model about carbon tax and carbon trading, but running the code reports an error, I don’t know where the problem is, and I ask for your guidance. The error is as follows:
There are 8 eigenvalue(s) larger than 1 in modulus
for 8 forward-looking variable(s)

The rank condition ISN’T verified!

MODEL_DIAGNOSTICS: No obvious problems with this mod-file were detected.
错误使用 print_info (line 48)
Blanchard Kahn conditions are not satisfied: indeterminacy due to rank failure

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

出错 test (line 586)
info = stoch_simul(var_list_);

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

model_diagnostics(M_,options_,oo_)
MODEL_DIAGNOSTICS: No obvious problems with this mod-file were detected.

2

I can only give you the generic advice. Try to simplify the model to see where the problem comes from.

3

Dear jpfeifer,I simplified the model and the following problems occurred:
错误使用 print_info (line 42)
Blanchard Kahn conditions are not satisfied: no stable equilibrium

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

出错 model1 (line 596)
info = stoch_simul(var_list_);

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

steady_helper1.m (182 Bytes)
model1.mod (5.9 KB)
model1_steady.m (3.0 KB)
model1_steady_helper2.m (424 Bytes)

4

So there is something causing instability in your model. You need to continue digging.

5

Thanks a lot.I will study again