Hi,
I am trying to code in Dynare the model by Eyquem and Kamber (2009).
In appendix, he presents key equations of the log-linearised model.
Within this post, I uploaded the Dynare code and the recap note summarising the how equations are written in the Dynare code.
However, I get the following error message :
There are 3 eigenvalue(s) larger than 1 in modulus
for 4 forward-looking variable(s)
The rank condition ISN’T verified!
What does this message mean ?
Thank you for your help,
Kind regards
Eyquem_Kamber_Lee.mod (2.51 KB)
Euquem Macroeconomic Volatility and Exchange Rate Pass{through under Internationalized Production.pdf (292 KB)
Eyquem_Kamber_2009_code_recap.pdf (70 KB)