Could I ask when I run simulation with Dynare, why when the explosive roots=forward-looking variables in number already, it is still indeterminacy (as shown below)? And how to deal with this issue generally?
Many thanks in advance！
"There are 5 eigenvalue(s) larger than 1 in modulus
for 5 forward-looking variable(s)
The rank condition ISN’T verified!
MODEL_DIAGNOSTICS: No obvious problems with this mod-file were detected.
Error using print_info (line 32)
Blanchard & Kahn conditions are not satisfied: indeterminacy due to rank failure."
Probably because your model is specified incorrectly, as not all of the equations are linearly independent.
Exactly. Try running
model_diagnostics. Maybe it shows something.
Thanks, I have run it but it shows “MODEL_DIAGNOSTICS: No obvious problems with this mod-file were detected.”…
Without the mod-file it is impossible to say anything more.
Are you sure that putting the expectational error on y (which is always determinate) is correct? Shouldn’t it be
Thanks. The problem may still be some equations linearly independent. I am wondering if it can be called ‘source’ in the case that ‘Blanchard & Kahn conditions are not satisfied: indeterminacy due to rank failure’.