Error while I am running

Dear all,

I am attempting to solve a variant of the BGG (1999) model but have encountered an error. I receive the following message:

Error using print_info
Blanchard & Kahn conditions are not satisfied: indeterminacy.

Error in stoch_simul (line 120)
    print_info(info, options_.noprint, options_);

Error in loglinearBZ.driver (line 353)
[info, oo_, options_, M_] = stoch_simul(M_, options_, oo_, var_list_);

Error in dynare (line 278)
    evalin('base',[fname '.driver']);

Do any of you have an idea why this is happening? It seems my predeterminated variables are correctly specified.

Attempt.mod (3.9 KB)

Thank you in advance for your assistance! I’ve attached the .mod file for your reference.

I run your model. You have Blanchard-Kahn error in Dynare output. In these situations in many cases this problem is due to the timming issue for one or more variables of the model.

The other issue is that you write your model in a non-linear form but it seems that some of your equations are in linerar form.

This is very hard to debug. Have you compared your implementation to other BGG versions here in the forum and particularly to Cesa-Bianchi’s version?

I did it. It seems coherent. I have two predeterminated variables. This is the only difference.

Can you explain the logic of

    o = deltao*k(-1) + (1-deltao)*o(-1);       // 4.23 Capital accumulation

What is o?

o is an intangible capital that grows according to the previous period capital which enhances productivity.

Have you tried whether it works if you turn off that feature?

Yes, I still get the same error.

But then you should be back to the original BGG model. So what is the difference?