Hello, I am trying to replicate the model of the paper by Gianluca Benigno and Christoph Thoenissen (which I attach below).
I was copying all the equations that they use in their work, where I got a total of 38 equations and 38 variables.
And the model throws me the following: Blanchard & Kahn conditions are not satisfied: indeterminacy.
with model_diagnostics (M_, options_, oo_): No obvious problems with this mod-file were detected.
I think that perhaps the error is in how I am modeling the shocks, since in the paper it puts them as matrices A = Omega * A (-1) + mu, where A is a matrix A = [AH, AF, AN, ANstar] and mu = [muH, muF, muN, muNstar].
Any help would be highly appreciated.