I am quite new in the use of dynare and I hope someone can help me in a problem of my code.
My problems are: Rank conditions is not verified and Blanchard Conditions are not satisfied.
I’ve being trying several manners to solve the problem, I did, somehow, but I am afraid it is not
a good solution.
The model has 10 eigenvalues and 9 forward looking variables. In my model I have 2 shocks,
technological and liquidity shock. I expressed them both as predetermined varibles, i.e.,
technological shock in t depending on previous period. So as I did with the liquidity shock.
The manner I solved was putting the liquidity shock as forward looking variable, i.e.,
liquidity shock in t+1 depending on previous period.
After this change, the code is working, but I am puzzled about the graphs that I am obtaining.
Could someone advice me about this change that I did? whether it is totally wrong or I should
check other solutions?
Thank you in advance.