I have a problem related to Blanchard Kahn conditions in my NK DSGE model.
Here is the problem.
dynare linDSGE
Starting Dynare (version 6.1).
Calling Dynare with arguments: none
Starting preprocessing of the model file …
Found 29 equation(s).
Evaluating expressions…
Computing static model derivatives (order 1).
Normalizing the static model…
Finding the optimal block decomposition of the static model…
7 block(s) found:
6 recursive block(s) and 1 simultaneous block(s).
the largest simultaneous block has 17 equation(s)
and 17 feedback variable(s).
Computing dynamic model derivatives (order 2).
Normalizing the dynamic model…
Finding the optimal block decomposition of the dynamic model…
6 block(s) found:
5 recursive block(s) and 1 simultaneous block(s).
the largest simultaneous block has 18 equation(s)
and 15 feedback variable(s).
Preprocessing completed.
Preprocessing time: 0h00m00s.
EIGENVALUES:
Modulus Real Imaginary
1.216e-17 1.216e-17 0
0.1912 -0.1912 0
0.2555 0.2555 0
0.6269 0.6269 0
0.7102 0.7102 0
0.8 0.8 0
0.8936 0.8936 0
1.034 1.034 0
1.13 1.13 0
1.22 1.22 0
1.376 1.376 0
4.577e+15 -4.577e+15 0
There are 5 eigenvalue(s) larger than 1 in modulus for 6 forward-looking variable(s)
The rank condition ISN’T verified!
Error using print_info (line 33)
Blanchard & Kahn conditions are not satisfied: indeterminacy.
Error in stoch_simul (line 119)
print_info(info, options_.noprint, options_);
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Error in linDSGE.driver (line 932)
[info, oo_, options_, M_] = stoch_simul(M_, options_, oo_, var_list_);
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Error in dynare (line 310)
evalin(‘base’,[fname ‘.driver’]);
Here is my model.
linDSGE.txt (4.1 KB)
How can I fix it?