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