Hi
I run my model but I get a Blanchard Kahn error.eeetaylor.mod (3.9 KB)
I’m checking the timng of model to fix this error.Help me if you can.Thank you in advance for your kindness
There is a banking section in my model.The profit function of banks is as follows:
L=loan
D=deposit
BD=debt to central bank
And we have a balance sheet constraint as follows:
I have designed and solved the problem as follows:
Is my design correct?
Is the second method not correct?
I have seen in some articles that they have used the second method.for example:
Page 14 in
aaa.pdf (2.7 MB)
Which method do you think is right?
Thank you for helping me