Imaginary eigenvalues and Blanchard-Kahn condition


I have two questions, please answer them :slight_smile:

  • 1: what does it mean when the imaginary part of the eigenvalue is not equal to zero? Is that a problem?
  • 2: I have for example 5 forward-looking variables and just 4 eigenvalues larger than 1, then I change the timing of an equation by decreasing it by 1, and then there are 4 forward-looking variables and 4 eigenvalues larger than 1, so the rank condition is now verified. Is that an approppriate procedure?
    For example:

Thanks for Your help!!!

  1. As we are talking about generalized eigenvalues, this is not a problem - unless you get oscillating IRFs.
  2. No, this is not appropriate. There is one unique correct timing and you cannot arbitarily shift timings.
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