Code from Iacoviello and Neri (2010)


Dear Pro. Pfeifer,
I modified the model of Iacoviello and Neri (2010). In my model, I do only have one type household but add government sector so there’s no credit constraint among household. Government sector can sell land to housing firm to generate revenue. With land-sales revenue, tax, bond, government can finance its expenditure on its maturity debt, purchase and public investment. The public investment is important since it is an input of consumption sector production function. Besides, I assume government has both land supply policy and public investment policy. That is, land supply adjust according to the gdp growth, housing price, debt, and public investment respond to gdp growth as well as debt.

I wrote the code step by step and check very carefully. But still get the “Blanchard Kahn conditions are not satisfied: no stable equilibrium”. I guess my model may have problem but can’t figure out.

There are 8 eigenvalue(s) larger than 1 in modulus
for 7 forward-looking variable(s)

The rank condition ISN’T verified!

错误使用 print_info (line 42)
Blanchard Kahn conditions are not satisfied: no stable equilibrium

出错 stoch_simul (line 100)
print_info(info, options_.noprint, options_);

出错 Benchmark_Simulation (line 508)
info = stoch_simul(var_list_);

出错 dynare (line 223)
evalin(‘base’,fname) ;

Can you help me?Benchmark.mod (21.9 KB)


I can only recommend checking the timing of all state variables as well as the market clearing conditions associated with these.