# Blanchard Kahn not satisfied: no stable equilibrium **URL:** \ **Category:** Dynare help (legacy posts)\ **Created:** [19 February 2014 13:06 UTC](https://forum.dynare.org/t/blanchard-kahn-not-satisfied-no-stable-equilibrium/3712 "2014-02-19T13:06:50Z")\ **Posts on this page:** 4\ **Page:** 1
**Author:** ![zsm](https://forum.dynare.org/letter_avatar_proxy/v4/letter/z/779978/32.png) [@zsm](https://forum.dynare.org/u/zsm)\ **Post date:** [19 February 2014 13:06 UTC](https://forum.dynare.org/t/blanchard-kahn-not-satisfied-no-stable-equilibrium/3712/1 "2014-02-19T13:06:50Z")
Hi, when I run the attached code (a New Keynesian model with heterogenous firms), I get the following error message: There are 18 eigenvalue(s) larger than 1 in modulus for 18 forward-looking variable(s) The rank condition is verified. Error using print\_info (line 40) Blanchard Kahn conditions are not satisfied: no stable equilibrium Error in stoch\_simul (line 81) print\_info(info, options\_.noprint); Error in Family\_IRF\_highgamma\_kappaF\_govBC\_rev (line 539) info = stoch\_simul(var\_list\_); Error in dynare (line 120) evalin(‘base’,fname) ; I know that it might mean that one equation is redundant (usually an issue with the market clearings and the budget constraints) and another equation is missing. But the fact is that I only include the household and government budget constraints and the profit functions of the firms, and no additional resource constraint is added, so I am wondering that the error message might be related to smething else. Could you please have a loook at the code and give me some hint how to find the mistake? Thanks! [Family\_IRF\_highgamma\_kappaF\_govBC\_rev.mod](https://forum.dynare.org/uploads/default/original/2X/3/37b32c121af92cfb2b7bbc1705666545358bcba9.mod) (10.4 KB) ---
**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Post date:** [20 February 2014 11:06 UTC](https://forum.dynare.org/t/blanchard-kahn-not-satisfied-no-stable-equilibrium/3712/2 "2014-02-20T11:06:18Z")
Use model\_diagnostics. It will tell you [quote]model\_diagnostic: the Jacobian of the static model is singular there is 1 colinear relationships between the variables and the equations Colinear variables: B Colinear equations Columns 1 through 30 ``` 5 6 7 8 9 10 11 12 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 34 36 37 38 ``` Columns 31 through 43 ``` 39 40 41 42 44 45 46 47 48 49 51 52 53 ``` The presence of a singularity problem typically indicates that there is one redundant equation entered in the model block, while another non-redundant equation is missing. The problem often derives from Walras Law.[/quote] If B is bonds, you might have problems with Ricardian equivalence. ---
**Author:** ![zsm](https://forum.dynare.org/letter_avatar_proxy/v4/letter/z/779978/32.png) [@zsm](https://forum.dynare.org/u/zsm)\ **Post date:** [20 February 2014 11:31 UTC](https://forum.dynare.org/t/blanchard-kahn-not-satisfied-no-stable-equilibrium/3712/3 "2014-02-20T11:31:01Z")
Yes, I have also realised that the issue might be with B. The reason might be that B which is indeed bonds, savings of the household is zero in every period, not only in the SS, so I guess it cannot be included in the model at all. So I dropped B. But then I have one more equations than the number of variables, so I should drop a shock equation, too. But I cannot as I need all the shocks. Also, if I redefine B as government bonds and than this way B should enter not only the HH BC, but also the gov BC, I still get the same error message, although neither the SS of B, nor the dynamic valeus of B are zero. Can you suggest me how to solve this issue? What am I missing here? Thanks! ---
**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Post date:** [20 February 2014 13:05 UTC](https://forum.dynare.org/t/blanchard-kahn-not-satisfied-no-stable-equilibrium/3712/4 "2014-02-20T13:05:04Z")
You should start from the most simple model and go from there. You already have one equation too much, namely that B=0. You can not have B in the model. But due to Walras law, one market clearing condition is redundant. Usually, the government budget constraint should be implied by the private one. Try dropping it.