Hello everyone,
When I run my model dynare warned me “The rank condition ISN’T verified!”
Here is the error message from dynare:
STEADY-STATE RESULTS:
cc -3.04938
dd -1.29104
LL -6.57381
DD -0.0279858
ss 0.16585
ww 2.59025
YY -2.21523
KK 6.634
RR_s 5.57605
RR_d 6.06093
mumu 5.81849
thetatheta 0
EIGENVALUES:
Modulus Real Imaginary
1.368e-17 -1.368e-17 0
1.854e-16 -1.854e-16 0
2.372e-16 2.372e-16 0
0.04891 0.04891 0
0.75 0.75 0
1 1 0
7.414e+15 -7.414e+15 0
2.535e+31 -2.535e+31 0
There are 2 eigenvalue(s) larger than 1 in modulus
for 4 forward-looking variable(s)
The rank condition ISN’T verified!
MODEL SIMULATION:
Iter: 1, err. = 3.1086e-15, time = 0.063
Total time of simulation: 0.066
Perfect foresight solution found.
Total computing time : 0h00m00s
Note: warning(s) encountered in MATLAB/Octave code
How can I fix this? Please help I am new to dynare.
I have attached the code .project.mod (1.2 KB)
Thanks
Ada