Dear friends I receive the error of “There are 9 eigenvalue(s) larger than 1 in modulus
for 9 forward-looking variable(s)” in dynare but I think when there is such situation means dynare solve the model and give impulse response. can any one help me?
is not there any one to answer me?
You neither properly uploaded your file and nor did you provide the full error message.
yes I send my file
the error is:
There are 9 eigenvalue(s) larger than 1 in modulus
for 9 forward-looking variable(s)
The rank condition ISN’T verified!I do not know why the file can not load for that I send you the cods:
var
c1 e mf h n1h n2h c2 c z B ccb zs n cm cd gamad gamam gamax pix delen pid pim im exno fr pif yf invd pinv invm y1 n1f f1 f k1 pi mc1 mc2 mcim mc w mh mcm id d k ii rk inv q y a L rl n2f k2 y2 f2 d2 d1 m delthab Lcb rr kb pib or g mui shi_h shi_mf shi_inv shi_i u_en;
varexo
u_a u_mh u_or u_g u_rr u_shi_i u_delthab u_shi_inv u_yf u_pif shien u_mf u_ccb;
Parameters
betta
etta
pi_b
ii_b
id_b
ve
be
rho_mh
phi_ns
rho_inv
deltha
rk_b
alfinv
alphha
ltvf
wn_L
rkK_L
car
capa
delthab_b
rr_b
rho_rr
L_d
Lcb_d
kb_d
omegha
rho_a
rho_delthab
rho_or
rho_g
rho_i
rho_pi
rho_y
rho_mui
rhoshi_i
inv_y
c_y
eor_y
g_y
rlL_pib
idd_pib
iiLcb_pib
delthakb
thac2mu_c2h
wn2h_c2h
etc1_c
etc2_c
etnh
ety
etk
etnf
mfm_m
mh_m
alfc
gamad_b
gamam_b
etac
etainv
nu
gama
emf_b
mh_b
h_b
x
ef1_L
ef2_mf
wn2f_mf
etmc
etf
etax
rho_yf
rho_pif
omegam
f_im
invm_im
cm_im
x_fr
or_fr
im_fr
mcm_mb
rrd_mb
gamamim_y
egamax_y
rho_en
rho_uen
omegpien
omegfren
exno_ex
or_ex
rho_mf
pho_uen
rho_mb
mf_fr
etay
omegy
omege
omega_di
theta_id_bar
theta_im_bar
or_z
ex_z
im_z
z_y
rho_ccb
;
//-------------------Parametrization---------------------------------//
betta=0.965;
etta=0.15;
pi_b=1.042246635;
ve=0.6;
be=1.3;
ii_b=(pi_b/betta)-1;
rho_mh=0.9;
phi_ns=2.938;
rho_inv=0.3628;
deltha=0.011;
rk_b=(1/betta)-1+deltha;
alfinv=3.9355;
alphha=0.412;
ltvf=0.9;
wn_L=0.2;
rkK_L=0.6;
car=0.08;
capa=0.01;
delthab_b=0.1;
rr_b=0.18;
id_b=(1-rr_b)*ii_b;
rho_rr=0.95;
L_d=1.1;
Lcb_d=0.11;
kb_d=0.11;
omegha=0.3;
rho_a=0.56;
rho_delthab=0.069;
rho_or=0.549;
rho_g=0.75;
rho_i=0.8628;
rho_pi=2.5;
rho_y=0.35;
rho_mui=0.86286;
rhoshi_i=0.8;
inv_y=0.19;
c_y=0.51;
eor_y=0.1986;
g_y=0.19;
rlL_pib=9;
idd_pib=9;
iiLcb_pib=1;
delthakb=0.014;
thac2mu_c2h=0.3;
wn2h_c2h=0.9;
etc1_c=0.8;
etc2_c=0.2;
etnh=0.3;
ety=0.6;
etk=0.6;
etnf=0.55;
mfm_m=0.65;
mh_m=0.4;
alfc=0.817;
gamad_b=1;
gamam_b=1;
etac=3.4;
etainv=3.1;
nu=0.812;
gama=0.2;
emf_b=((nu/(1+nu))*(1-etta)*(((1-etta)/etta)^(-etta))*((1+ii_b-pi_b)/(ii_b-id_b))*((ii_b/(ii_b-id_b))^(-etta)))^(1/(gama-1));
mh_b=((ii_b-id_b)/(1+ii_b-pi_b))*((1-nu)/(nu*(1-etta)))*(emf_b^(gama-1));
h_b=(nu*(mh_b^gama)+((1-nu)*(emf_b^gama)))^(1/gama);
x=0.86;
ef1_L=0.2;
ef2_mf=0.6;
wn2f_mf=0.4;
etmc=0.5;
etf=0.5;
etax=1.1;
rho_yf=0.645;
rho_pif=0.8;
omegam=0.4;
f_im=0.62;
invm_im=0.23;
cm_im=0.15;
rrd_mb=0.684;
mcm_mb=0.2;
x_fr=0.3;
or_fr=1.7;
im_fr=1.5;
gamamim_y=0.2;
egamax_y=0.08;
rho_en=0.7;
rho_uen=0.8;
omegpien=-1.9;
omegfren=-1.55;
exno_ex=0.16;
or_ex=0.63;
rho_mf=0.725;
pho_uen=0.734;
rho_mb=0.98;
mf_fr=0.97;
etay=1.6;
omegy=-0.5;
omege=-2.057 ;
omega_di=0.956;
theta_id_bar=1.98 ; theta_im_bar=0.87;
or_z=4.66;
ex_z=0.48;
im_z=4.15;
z_y=0.1;
rho_ccb=0.45;
//----------------------Model Declaration Block--------------------------------//
model(linear);
mh=etta*mcm+(1-etta)*d1;
// money demand//
//shi_h+((1-etta)*d1)+((etta-1)*mcm)+((1-ve-gama)*h)=(-be*c1)+((1/ii_b)*ii);
// deposit demand//
//shi_h+((-etta)*d1)+(etta*mcm)+((1-ve-gama)*h)=(-be*c1)+((1/ii_b)*(ii-id));
//The difference of two recent relationship//
d1-mcm=(1/ii_b)*(id);
//foreign money demand//
(-be*c1)+((1+ii_b)/(1+ii_b-pi_b))*e-(pi_b/(1+ii_b-pi_b))*(e(+1)-pif(+1)-ii)=shi_h+shi_mf+gama*e+((1-ve-gama)*h)+(gama-1)*mf;
//money demand shock//
shi_h=rho_mh*shi_h(-1)+u_mh;
shi_mf=rho_mf*shi_mf(-1)+u_mf;
//the agrigation of domestic and foreign money//
h=(nu*(mh_b^gama)/h_b)*mh+((1-nu)*(emf_b^gama)/h_b)*(e+mf+(1/gama)*shi_mf);
//labor supply//
phi_ns*n1h=w-(be*c1);
//invetment shock//
shi_inv=rho_inv*shi_inv(-1)+u_shi_inv;
//capittal//
k=((1-deltha)*k(-1))+(deltha*(inv+shi_inv));
//Euler//
c1=c1(+1)-((1/be)*(ii-pi(+1)));
//capital price//
q=(((1-deltha)/(1-deltha+rk_b))*q(+1))+((rk_b/(1-deltha+rk_b))*rk(+1))-(ii-pi(+1));
//investment//
inv=(1/(1+betta))*inv(-1)+(betta/(1+betta))*inv(+1)-(1/(1+betta))*(pid-pinv)+(1/(alfinv*(1+betta)))*q+shi_inv;
//the Composition of domestic and foreign inflation//
pi=alfc*(gamad_b^(1-etac))*pid+(1-alfc)*(gamam_b^(1-etac))*pim;
//the rathio of prices //
gamad=pid-pi+gamad(-1);
gamam=pim-pi+gamam(-1);
//the Composition of domestic and foreign investment and consumption//
invd=inv-etainv*(gamad);
invm=inv-etainv*(gamam);
pinv=omega_di*(theta_id_bar)^(1-etainv)*pid+(1-omega_di)*(theta_im_bar)^(1-etainv)*pim;
cd=c-etac*(gamad);
cm=c-etac*(gamam);
//the second household//
phi_ns*n2h=w-be*c2;
c2=wn2h_c2h*(w+n2h);
// household agrigation//
c=etc1_c*c1+etc2_c*c2;
n=etnh*n1h+(1-etnh)*n2h;
//prodution function//
y1=a+alphha*x*k1(-1)+(1-alphha)*x*n1f+(1-x)*f1;
//prodution function//
y2=a+alphha*x*k2(-1)+(1-alphha)*x*n2f+(1-x)*f2;
//factor demand//
w=k1(-1)+rk-n1f;
gamam=rk+k1(-1)-f1;
//marginal cost//
mc1=-a+(alphha*x*rk)+((1-alphha)*x*w)+(1-x)*(gamam)+rl;
//Loan of firm from bank//
L=(ltvf*wn_L*(w+n1f))+(ltvf*rkK_L*(rk+k1(-1)))+(ltvf*ef1_L*(gamam+f1));
//labor and capital and money demand of second firm//
// w=mc2+y2-n2f-id;
w=mc2-id+a+((1-alphha)*x-1)*n2f+x*(alphha)*k2(-1)+(1-x)*f2;
//k2(-1)=mc2+y2-rk;
rk=mc2+(1-alphha)*x*n2f+x*(alphha-1)*k2(-1)+(1-x)*f2+a;
pi_b*wn2f_mf*(w+n2f)+pi_b*ef2_mf*(gamam+f2)=d2(-1)-pi;
//f2=mc2+y2-e-id;
gamam=mc2-id+a+(1-alphha)*x*n2f+x*(alphha)*k2(-1)+(-x)*f2;
//marginal cost of second firm//
mc2=-a+(1-alphha)*x*w+alphha*x*rk+(1-(alphha*x))*id+(1-x)*gamam;
//firms agrigation//
mc=etmc*mc1+(1-etmc)*mc2;
y=ety*y1+(1-ety)*y2;
k(-1)=etk*k1+(1-etk)*k2;
n=etnf*n1f+(1-etnf)*n2f;
// n=etnh*n1h+(1-etnh)*n2h;
f=etf*f1+(1-etf)*f2;
//the intrest rate of loan of bank to firms//
rl=(1/(1-delthab_b))*ii+(delthab_b/(1-delthab_b))*delthab+((capa/ii_b)*(car^3)*(L-kb));
//deposit intrest rate//
id=ii+(1-(ii_b/id_b))*rr;
// id=ii-rr;
rr=rho_rr*rr(-1)+u_rr;
//debt of bank to central bank//
L_d*L=((1-rr_b)*d)-(rr_b*rr)+(Lcb_d*Lcb)+((kb_d)*kb);
//technology shock//
a=rho_a*a(-1)+u_a;
//phillps curve//
pid=betta*pid(+1)+((1-(omegha*betta))*(1- omegha)/ omegha)*mc;
//phillps curve//
// pi2=betta*pi2(+1)+((1-(omegha*betta))*(1- omegha)/ omegha)*mc2;
//default rate//
delthab=rho_delthab*delthab(-1)+(0.15*y)+u_delthab;
//foreign sector//
pix=pid-delen;
exno=-etax*(gamax)+yf+etay*y;
//ex=exno_ex*exno+or_ex*or;
mf-mf(-1)=0.234*(e+exno+(gamax))+0.56*(or+e)-0.176*(im+gamam);
yf=rho_yf*yf(-1)+u_yf;
pif=rho_pif*pif(-1)+u_pif;
gamax=pix-pif+gamax(-1);
mcim=e-(gamam);
//gamaim=pim-pi+gamaim(-1);
or=rho_or*or(-1)+u_or;
pim=(1/(1+betta))*pim(+1)+((1-omegam*betta)*(1-omegam)/omegam)*mcim;
im=(cm_im)*cm+invm_im*invm+f_im*f;
zs=or_z*or+ex_z*(pix+exno)+im_z*(pim+im);
z=e+zs;
//monetary policy//
fr=fr(-1)-pif+x_fr*exno+or_fr*or-im_fr*im-mf_fr*(mf-mf(-1));
//mb=mcm_mb*mcm+rrd_mb*(rr+d);
//mb=rho_mb*mb(-1)+u_mb;
//government expenditure shock//
g=rho_g*g(-1)+0.54*(or+e)+u_g;
//money growth rate//
mui=m-m(-1)+pi;
//money agrigation//
m=mfm_m*d2+mh_m*mh;
//intrest rate target (monatary policy target)//
ii=rho_i*ii(-1)+rho_pi*(pi)+rho_y*(y)+rho_mui*(mui)+shi_i;
shi_i=rhoshi_i*shi_i(-1)+u_shi_i;
//resource constraint//
// y=(c_y)*c+(inv_y)*inv+(g_y)*g-(eor_y)*(e+or)+egamax_y*(e+exno+gamax)-gamamim_y*(gamam+im);
y=(c_y)*c+(inv_y)*inv+(g_y)*g+z_y*z-(eor_y)*(e+or);
//bank benefit//
pib=(rlL_pib*(1-delthab_b)*(rl+L))-(idd_pib*(id+d))-(iiLcb_pib*(ii+Lcb))-B;
d=0.3*d1+0.7*d2;
//bank capital//
kb=((1-delthakb)*kb(-1))+(delthakb*pib(-1));
B=capa/ii_b*(car)^3*(L-kb);
//B=-capa/ii_b*((kb-L)+ ccb);
//B=-capa/ii_b*((kb-L)-ccb);
ccb=rho_ccb*ccb(-1)+u_ccb;
e=delen+pif-pi+e(-1);
delen=rho_en*delen(-1)+omegpien*pi+omegfren*(e+fr-y)+omegy*y+omege*e+u_en;
u_en=pho_uen*u_en+shien;
end;
//----------------------Initial Value of Endogenous Variables Block -----------//
initval;
c1=0; e=0; mf=0; h=0; z=0; zs=0; B=0; ccb=0; n1h=0; n2h=0; gamad=0; gamam=0; gamax=0; c2=0; d1=0; c=0; pinv=0; n=0; cm=0; cd=0; pix=0; delen=0; pid=0; pim=0; im=0; fr=0; pif=0; yf=0; invd=0; invm=0; y1=0; n1f=0; f1=0; f=0; k1=0; pi=0; mc1=0; mc2=0; mcim=0; mc=0; w=0; mh=0; mcm=0; id=0; d=0; k=0; ii=0; rk=0; inv=0; q=0; y=0; a=0; L=0; rl=0; n2f=0; k2=0; y2=0; f2=0; d2=0; m=0; delthab=0; Lcb=0; rr=0; kb=0; pib=0; or=0; g=0; mui=0; shi_h=0; shi_mf=0; shi_inv=0; shi_i=0; u_en=0;
end;
steady;
check;
//----------------------The Shocks Block---------------------------------------//
shocks;
// var u_a; stderr 0.01;
// var u_mh; stderr 0.01;
var u_or; stderr 0.01;
// var u_g; stderr 0.01;
//var u_ccb; stderr 0.01;
// var u_rr; stderr 0.01;
// var u_shi_i; stderr 0.01;
// var u_delthab; stderr 0.01;
// var u_shi_inv; stderr 0.01;
//u_yf; stderr 0.01;
// u_pif; stderr 0.01;
// shien; stderr 0.01;
// u_mf; stderr 0.01;
// u_mb; stderr 0.01;
end;
//----------------------The Simulation Block-----------------------------------//
stoch_simul(periods=10000, irf=50);
Your model fails the rank condition. That is typically due to including an equation that is already implied by the others. I can only give you the generic advice: try to simplify your model to see where the issue comes from.