I don’t know what’s wrong with the code. Blanchard Kahn conditions are not satisfied.
The following is dynare code about international real business cycle modle. Who can help me check it? Thank you very much!
periods 20100;
var U1,c1,y1,n1,k1,G1,a1,b1,x1,r1,w1,qa1,qb1,z1
U2,c2,y2,n2,k2,G2,a2,b2,x2,r2,w2,qa2,qb2,z2;
varexo e1,e2;
parameters mu,gama,omega,sigma,theta,delta,A11,A12,A21,A22,beta;
beta=0.99;
mu=0.34;
gama=-1;
theta=0.36;
delta=0.025;
sigma=0.9;
A11=0.97;
A12=0.025;
A21=0.025;
A22=0.97;
omega=0.8730;
model;
U1=( exp(c1)^mu*( 1-exp(n1) )^( 1-mu ) )^gama/gama;
exp(y1)=exp( z1 )exp(k1)^thetaexp(n1)^( 1-theta );
exp(G1)=( omega*exp(a1)^( ( sigma-1 )/sigma )+( 1-omega )*exp(b1)^( ( sigma-1 )/sigma ) )^( sigma/( sigma-1 ) );
U2=( exp(c2)^mu*( 1-exp(n2) )^( 1-mu ) )^gama/gama;
exp(y2)=exp( z2 )exp(k2)^thetaexp(n2)^( 1-theta );
exp(G2)=((1- omega)exp(a2)^( ( sigma-1 )/sigma )+omegaexp(b2)^( ( sigma-1 )/sigma ) )^( sigma/( sigma-1 ) );
//Euler Equation
U1/exp(c1)=beta*( U1( +1 )/exp(c1( +1 )) )*( 1-delta+exp(qa1( +1 ))*exp(r1( +1 )) );
U2/exp(c2)=beta*( U2( +1 )/exp(c2( +1 )) )*( 1-delta+exp(qb2( +1 ))*exp(r2( +1 )) );
//Marginal substitution of consumption and leisure
( 1-mu )gama( U1/( 1-exp(n1) ) )=mugama( U1/exp(c1) )*exp(w1)*exp(qa1);
( 1-mu )gama( U2/( 1-exp(n2) ) )=mugama( U2/exp(c2) )*exp(w2)*exp(qb2);
//Production side
exp(r1)=theta*exp(y1)/exp(k1);
exp(r2)=theta*exp(y2)/exp(k2);
exp(w1)=( 1-theta )*exp(y1)/exp(n1);
exp(w2)=( 1-theta )*exp(y2)/exp(n2);
exp(qa1)=omega*exp(a1)^( -1/sigma )*exp(G1)^( 1/sigma );
exp(qb1)=( 1-omega )*exp(b1)^( -1/sigma )*exp(G1)^( 1/sigma );
exp(qa2)=( 1-omega )*exp(a2)^( -1/sigma )*exp(G2)^( 1/sigma );
exp(qb2)=omega*exp(b2)^( -1/sigma )*exp(G2)^( 1/sigma );
//Market clearing conditions
exp(c1)+exp(x1)=exp(G1);
exp(k1( +1 ))=exp(k1)*( 1-delta )+exp(x1);
exp(c2)+exp(x2)=exp(G2);
exp(k2( +1 ))=exp(k2)*( 1-delta )+exp(x2);
exp(a1)+exp(a2)=exp(y1);
exp(b1)+exp(b2)=exp(y2);
//Exogeneous shocking
z1=A11z1( -1 )+A12z2( -1 )+e1;
z2=A21z1( -1 )+A22z2( -1 )+e2;
//Risk sharing
( U1/exp(c1) )*exp(qa1)=( U2/exp(c2) )*exp(qa2);
exp(qa1)/exp(qa2)=exp(qb1)/exp(qb2);
end;
initval;
n1= -1.1803 ;
k1=1.8283 ;
qa1=-0.4023;
qb1=-0.4023;
c1=-0.7958;
a1=-0.2597;
b1=-1.9943;
z1=0;
e1=0;
n2=-1.1803;
k2=1.8283;
qa2=-0.4023;
qb2=-0.4023;
c2=-0.7958;
a2=-1.9943;
b2=-0.2579;
z2=0;
e2=0;
U1 = -1.6699;
y1 = -0.0972;
G1 = -0.4995;
U2 = -1.6699;
y2 = -0.0972;
G2 = -0.4995;
r1 = -2.9472;
r2 = -2.9472;
w1 = 0.6368;
w2 = 0.6368;
end;
steady;
check;
shocks;
var e1=0.0073^2;
var e2=0.0044^2;
var e1,e2=0.2900.00730.0044;
end;
stoch_simul(order=1);