Blanchard Kahn Rank order condition not satisfied

Stochastic simulations
1

I am a beginner in estimating DSGE models. I was trying to replicate a DSGE model in a game theoretic framework estimated for Brazil economy using a quadratic loss function to estimate welfare. The Blanchard Kahn rank order condition is not satisfied. I have attached the paper from which i have coded the normal game simulation of Nash equilibrium for interaction between Monetary and fiscal policies. I’ll also attach the .mod file. Could anyone help in resolving the issue.

brazil_model.mod (4.3 KB)
2013_saulo_rego_divino.pdf (2.3 MB)

2

Your model features explosiveness, so your fiscal rules are insufficient to control debt.

3

Thank you sir for the reply. So then I must check the equation of fiscal rule and consider debt in that equation .