Explosive roots=forward-looking variables but still indeterminacy (rank failure)

[ZBCPA]

@ZBCPA

Sorry， I have uploaded the mod file. Could you please take a look at it on your convenience?
I use Bianchi and Nicolo’s method to make one degree of indeterminacy model to be determinant… so I have equation “z=1.5*z(-1)+sunspot-(y-expectation(-1)(y))” and set interest rate responds to inflation psipi <1. This method sucessfully works for indeterminacy model (already tried) like the one in Lubik and Shorfield (2004) when psipi<1. The attached model can also have two degree of indeterminacy when I keep psipi<1 and change some other calibration, under two degree of indetermincy with Bianchi and Nicolo’s method I can make the model determinant and sucessfully make it run.
But now , at one degree of indeterminacy, even I have make the explosive roots = forward-looking variables, dynare shows rank failure…

model_test.mod (1.4 KB)