I’ve been replicating a classic paper Financial Business Cycle written by Matteo Iacoviello given the origin dynare codes on his homepage.
I transformed the original one to a log-linear form. But the result shows: The rank condition ISN’T verified!. I compare the value of all the parameters and steady-states variables, and they are exactly the same. That makes me really confused. Could anyone help me with it?
I also attach the original code by Matteo Iacoviello named fbctiny.mod and the log-linear form mod file written by myself named fbctinylinear.mod.
Thanks you so much!