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.
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.