Dear Prof. Pfeifer
I’m trying to replicate the following two-country dynamic general equilibrium model, but get actually the error “Blanchard Kahn conditions are not
satisfied: indeterminacy”. I think that my timing structure is wrong. But I think that net demand for bonds B, capital K, the amount of borrowings L and bond holdings A are predetermined variables(?)
I marked the corresponding explanations in the paper with a green square and would be extremely happy for any kind of help. I attached the mod-File and the formulas I’m using.
I also added a presentation from the authors concerning the paper.
Edit: I also simplified the whole thing to a problem with just one country and added this file.
Thanks a lot and Best regards
00_Slides.pdf (205.0 KB)
bbOneCountry.mod (2.9 KB)
bbKopie2.mod (3.6 KB)
00_Paper 01.pdf (749.1 KB)