Hello everyone,

I try to run the attached open-economy model that I have build, before that, my model was in closed economy and it worked well. I have introduced the simplest way to move from a closed to an open economy. I just have added the features necessary for imports-exports (no foreign debt). However, when I try to run the model, the BK conditions are not satisfied due to a collinearity problem. As I have added only 6 equations between the closed and the open model I do not see where is the problem because in my view, all the equations are necessary…

I would really appreciate if someone can help me with this.

Thanks in advance

Hugo

SimpleNk5opennew_steadystate.m (2.8 KB)

SimpleNk5opennew.mod (5.3 KB)