Error Blanchard & Kahn conditions

Stochastic simulations
1

Hi,

I am now trying to implement a stochastic implementation. I got the error “Error using print_info
Blanchard & Kahn conditions are not satisfied: indeterminacy.” Because a lot of these errors are because of timing, I already changed the capital timing. I don’t know what to do anymore.

My model has three sorts of agents: j=1,2 and 3 and two working periods and 1 retired period.

Kind regards,
Christel

Model_UK.mod (9.5 KB)
The paper:
An economic analysis of the existing taxation of Pensions (EET) versus an alternative regime (TEE).pdf (907.8 KB)

3

Hi,

I have substantially simplified the model. Moreover I rewrote the consumption constraints. I still have the same error.

Simplified1.mod (4.6 KB)

Hopefully now it will be easier to understand.

Kind regards,
Christel

4

Usually, it’s a timing issue. Did you have a look at other OLG model implementations that work?

5

Yes I did, I looked at a lot of other codes and people who struggle with the same error, but I did not figure it out.

6

@jpfeifer I think I have figured it out :+1:

7

What was it?

8

I rearranged all equations, for example c(2), s.t. it starts at t=0. Because of the dynamics in the budget constraints this works for the OLG.

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