I’m simulating a model based on Monacelli (2006). I keep getting Blanchard-Kahn indeterminacy, but the number of eigenvalues larger than 1 in modulus is equal to forward-looking variables’. I would really appreciate it if someone could take a look and point me in the right direction. Thanks a lot!

There are 9 eigenvalue(s) larger than 1 in modulus

for 9 forward-looking variable(s)

The rank conditions ISN’T verified!

??? Error using ==> print_info at 58

Blanchard Kahn conditions are not satisfied: indeterminacy due to rank failure

Error in ==> stoch_simul at 44

print_info(info);

Error in ==> hp_simul at 332

info = stoch_simul(var_list_);

Error in ==> dynare at 102

evalin(‘base’,fname) ;

hp_simul.mod (2.87 KB)