I am trying to replicate the model in the following paper:
Galí, J., López-Salido, J. D., & Vallés, J. (2007). Understanding the effects of government spending on consumption. Journal of the european economic association , 5 (1), 227-270.
However, dynare gives me the following errors:
Error using print_info (line 45)
Blanchard Kahn conditions are not satisfied: indeterminacy
Error in stoch_simul (line 100)
print_info(info, options_.noprint, options_);
Error in ModelGali (line 193)
info = stoch_simul(var_list_);
Error in dynare (line 235)
evalin(‘base’,fname) ;
I have understood that the error related to the Blanchard Kahn conditions typically related to the timing of variables. However, I could not find any mistakes. There probably are mistakes somewhere, but I have no idea where.
ModelGali.mod (2.0 KB)