Hi again. So originally, the error I was getting was:

There are 21 eigenvalue(s) larger than 1 in modulus

for 22 forward-looking variable(s)

The rank condition ISN’T verified!

Error using print_info (line 32)

Blanchard & Kahn conditions are not satisfied: indeterminacy.

The model seems to run (almost) without the BK errors, if I include either one of the lagrange multipliers (lambdah or lambdal), associated with either one of the two sectors’ borrowing constraints. If I include both I get the BK errors back as follows:

There are 21 eigenvalue(s) larger than 1 in modulus

for 20 forward-looking variable(s)

The rank condition ISN’T verified!

Error using print_info (line 32)

Blanchard & Kahn conditions are not satisfied: no stable equilibrium.

I have two questions

- is there any justification for the lagrange multiplier on the borrowing constraint of a sector to be predetermined? And why for only one sector when there is another symmetrically borrowing constrained sector?
- Even when I do not get the BK errors, once I allow one of the lagrange multipliers to be predetermined, the model runs all the way to variance decomposition and then gives the following errors:

Error using cellfun

Input #2 expected to be a cell array, was char instead.

Error in cellofchararraymaxlength (line 20)

if ~all(cellfun(@ischar, c))

Error in dyntable (line 57)

headers_length = cellofchararraymaxlength(headers(2:end));

Error in US_IC3_v2.driver (line 1176)

dyntable(options_,‘Relative standard deviations’,strvcat(‘VARIABLE’,‘REL. S.D.’),M_.endo_names(1:74,:),statistic1,10,8,4);

Error in dynare (line 281)

evalin(‘base’,[fname ‘.driver’]);

It seems to do with the dyntable command - any idea how to fix this one? I attach the modfile again. Thanks very much in advance. Any help will be greatly appreciated!

US_IC3_v2.mod (14.7 KB)