Hi, I met a serious problem that after I ran my .mod file I got the following error message:
Error using print_info (line 42)
Blanchard Kahn conditions are not satisfied: no stable equilibrium
Error in stoch_simul (line 100)
print_info(info, options_.noprint, options_);
Error in Iaco_Add_Tax (line 647)
info = stoch_simul(var_list_);
Error in dynare (line 235)
Here are so many similar problems on the forum, but most of them got error message from
But model_diagnostics told me that no obvious problems with this mod-file were detected!
Follow the discusses on the forum before, it is possible that there is a timing problem. But I can’t figure out where it is! I really need your help
The model what I compile is just adding the government to the Iacoviello(2010) mod file.
And the equations I added to the model are just the following four:
(1) exp(bg) + 2*exp(T) = E + exp(r(-1)-dp + bg(-1)) ;
(2) E = RHO_E*E(-1) + (1-RHO_E)PSI_Y(Y - Y_SS) + (eps_e);
(3) exp(TRATE) - TRATE_SS = RHO_T*(exp(TRATE(-1)) - TRATE_SS) + (1-RHO_T)( DELY(Y-Y_SS) + DELB*(exp(bg(-1))-BG_SS) + DELE*(exp(E)-1) );
(4) exp(T) = exp(TRATE + Y)/2;
The first equation is the government’s budget constraint; the second one is a equation to describe the movement of government expenditure; the third one is a equation to describe the movement of government lump-sum tax ratio; and the forth one is the definition of lump-sum tax which is applied to both the unconstrained and constrained household.
In addition to these four new equations, I only add an identical lump-sum tax and transfer to both the unconstrained and constrained household and leave all the other variables as unchanged; and where I compile as follows.
exp( c ) + exp(kc)/exp(a_k) + exp(kh) + exp(q+h) + exp(b) + exp(bg) = (1-DH)*exp(q+h(-1)-TRENDH) + exp(wc+nc) + exp(wh+nh) + (1-1/exp(X))exp(Y) + exp(r(-1)-dp)(exp(b(-1))+exp(bg(-1))) + (exp(rkc+zkc)+(1-DKC)/exp(a_k))*exp(kc(-1)-TRENDK) + (exp(rkh+zkh)+(1-DKH))exp(kh(-1)-TRENDY) + MULexp(q)exp(I) - exp(T) + KAPPA_TE/2;
exp(c1) + exp(q+h1) - (1-DH)exp(q+h1(-1)-TRENDH) = exp(wc1+nc1) + exp(wh1+nh1) +
exp(b) - exp(r(-1)-dp+b(-1)-TRENDY) - exp(T) + KAPPA_TE/2;
I think all these equations are seemed to be normal…?
Could you please have a look and give me some hint how to find the mistake?