I try to build model followed Leeper, Walker and Yang (2010) “Government investment and fiscal stimulus”. But when I input the log-lineared model into dynare and give the initial values of 0 to all the endogenous variables, the dynare report the error as follow:
??? Error using ==> print_info at 39
Blanchard Kahn conditions are not satisfied: no stable equilibrium
I wonder what could be the problem?How can I solve this problem?
Thanks for your attention.