I met some problems when running my own model, a two sector model with monetary policy. But dynare won’t run after solving steady state.

The error message are as follows:

??? Error using ==> print_info

Blanchard Kahn conditions are not satisfied: no stable equilibrium

Is that saying the number of explosive eigenvalues (abs(x)>1) is bigger than the number of predetermined variables?

When I make some revsion on the timing assumption, the same error message comes out with different explanations

Blanchard Kahn conditions are not satisfied: indeterminacy

Blanchard Kahn conditions are not satisfied: indeterminacy due to rank failure

Actually, based on my own computation, I have 4 predetermined variables and 4 or 5 eigenvalues bigger than 1(absolute value). I can’t figure out what is going on in dynare.

Attach my model file here

TSJH_sep26.mod (3.29 KB)

You have the Blanchard and Kahn condition wrong. The number of explosive eigenvalues must be equal to the number of forward looking variables.

Use ‘check’ to verify that the eigenvalues match you own computations.

As always in case of difficulties, try with a simpler model, a one country version, in your case, maybe shutting down some mechanisms, check that it works and add back features one by one to see where the difficulties start.

Best

Michel

hi

I have the same problem. Following your advice, I shut down one path and fortunetly, it works after that.

However, I still can’t find out the mistake in the shuted down path.

What kinds of problems is usually the case?

With equation, model specification or some other reasons?

Many Thanks.

The most frequent problem is an error in the timing of stock variables. But in complicated models, there can be many reasons, including the specific values of some parameters.

Best

Michel

I had a similar problem on an OLG model and then fixed it after reading this paper. The time periods for each variable must agree with certain simple conditions.

ideas.repec.org/p/sce/scecf0/225.html

Bok

I also have this problem when running my model:

??? Error using ==> print_info at 45

Blanchard Kahn conditions are not satisfied: indeterminacy due to rank failure

what does this mean? how can i fix it?..