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

[MLOTB]

Hello everyone,

When I simulated the DSGE model, I found this problem: “Blanchard & Kahn conditions are not satisfied: indeterminacy due to rank failure.” And this message appeared:
There are 4 eigenvalue(s) larger than 1 in modulus
for 4 forward-looking variable(s)

   The rank condition ISN'T verified!

Could someone help me to clarify this? Any help would be much appreciated.

And the mod file is attached.

code12_forhelp.mod (4.6 KB)

[MLOTB]

I saw many people saying that the BK conditions are not satisfied due to timing. I corrected my equation regarding K, but there are still problems, and the error message “stoch_simul: using order = 1 because Hessian is equal to zero” appeared.

code12_forhelp.mod (4.5 KB)

[jpfeifer]

You may have the issue at

Timing of capital in two sector economy

Hello all, I am building a two-sectoral model, and I have a question about the timing of sectoral-capital variables: In my model, T and N are sectors, hence kT is capital in sector T and kN is capital in sector N. Then, I assume that the economy’s aggregate capital is simply: k = kT + kN. However, I assume only one law of motion for aggregate capital such that: k = (1-delta)*k(-1) + i - written in Dynare language. It is clear to me that k is a predetermined variable and should be treated as su…

[MLOTB]

Thank you ，professor. I have solved my problem.