Blanchard Kahn conditions are not satisfied_Productive public capital


#1

Hello,

I faced a problem when run a DSGE model with dynare, the error is “Blanchard Kahn conditions are not satisfied: no stable equilibrium”. I used model_diagnostics, but it told me this: MODEL_DIAGNOSTICS: No obvious problems with this mod-file were detected.

Can anybody help me to find out what’s the problem that i missed? I’ll very appreciate about that.

Attachment is my code and the error message that dynare shows:

Thank you.

Grafica_1_alt_Sg.mod (4.5 KB)

There are 8 eigenvalue(s) larger than 1 in modulus
for 7 forward-looking variable(s)

The rank condition ISN’T verified!

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 Grafica_1_alt_Sg (line 379)
info = stoch_simul(var_list_);

Error in dynare (line 223)
evalin(‘base’,fname) ;


#2

You are loading a mat-file you did not provide, so I cannot run the code. But I would try changing the fiscal rules to see whether different feedback leads to a stable solution.