Dynare with Blanchard & Kahn conditions

Hello Professor,
I have a question about Blanchard & Kahn conditions . I use matlab to find the steady state of the model, and then use dynare to run the linearized model. When variable faiL_@{nos} and coefficients bar_faiL@{nos} bar_L@{nos} are not added, the program runs normally. After adding the above variables, the result shows that Blanchard & Kahn conditions are not satisfied: indeterminacy, or Blanchard & Kahn conditions are not satisfied: no stable equlibrium. I have confirmed that the model is correct for many times. I tried to change the coefficient, but failed. Could you please help me find out what the problem is?

code.zip (6.9 KB)

That’s impossible to tell. Something in your last modification makes the model indeterminate. If you are sure that the model is correct, then this must be an economic feature of the model and you should try to understand what causes this.

Thank you very much,the problem has been solved. I have another question , What should I do if shocks occur and last for 4 periods in the stochastic environment.? For example, when the fiscal policy occurs for four consecutive periods, histval is used to set the initial value of the initial endogenous variables of the second period (that is, the result of the first period of impact), then the initial value of the second period chart is still the steady state value. How can I achieve the results of the continuous shocks in the stochastic environment?

Are those surprise shocks in every period? Or are they anticipated?

Thanks,professor.Surprise shock occurred in 4 consecutive periods,Before 4 consecutive periods, the impact was not anticipated. the government announced first two periods’ shock at the beginning of first period, and three and four periods shock at the beginning of 3th period.

I see. Then you need to define a surprise and a one-period anticipated news shock and then use simult_ to define the simulation scenario. See

Thank you for your reply. The first and second periods can be realized by simulating a combination of surprise and news shocks.Then what should be done in the third and fourth periods? Repeat the first and second periods again, and then implement them by simult_?

Yes, exactly.

ok,thanks a lot.But I want to ask a stupid question, I didnot find the usage of simult_ function. Where can I find detailed information?

See e.g.

Hello Professor,
I need your help! I have another problem during the simulation. I use a linear model to simulate two overlapping shocks. In the first shock period, I know the random shocks in periods 1-3, and in the third period, I know the second shocks in periods 3-6. In this way, the second shock in the third period is not expected in periods 1 and 2. The first shock reduces capital by 5% and investment by 50%, and the second shock reduces capital by 6% and investment by 50%. These two shocks occur simultaneously in the third period. If the simult_ is used, the third period will reduce capital by 11% and investment by 100%. how can I do this simulation,please?

It sounds like this is a simple matter of specifying news and surprise shocks.

In the third period, the economy faces two capital shocks, but also two investment shocks, and investment should not be reduced by 100 percent, but by 50 percent, right? But with simul_ to make, the result is directly the superposition of the two impact investment results, what should I do?

What exactly is the question? simult_ allows you to specify full shock sequences. You simply need to pick the sequence of surprise and news shocks to generate the result you like.

To put it simply, two shocks occur at the same time, does simult_ overlap the two shocks, or overlap the results of each shock?