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)