I am currently working on a replication of the Baxter & Crucini 1995 paper on Business Cycles and the Asset Structure of Foreign Trade. When coding up the complete market EQ, however, Dynare tells me that the rank condition isn’t satisfied and there’s no stable EQ. I’ve tried finding the unit root but cannot spot the mistake - can someone please have a look at it and help me out?
Thank you very much for your help! (6.4 KB)BC1995_Dynareforum.mod (6.4 KB)