Indeterminacy: Blanchard Kahn conditions are not satisfied

Stochastic simulations
1

Hello,

I am trying to replicate a model after running my model, I keep getting the following error message.

STEADY-STATE RESULTS:

c 0.0676942
d 0.240622
L 0.0449275
D -0.0876108
s 0.16585
W 3.48282
Y 0.233544
K 6.634
R_s 0.915533
R_d 0.995145
mu 0.955339
theta 1
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 test (line 212)
info = stoch_simul(var_list_);

Error in dynare (line 223)
evalin(‘base’,fname) ;

I would appreciate your assistance as I am currently new to dynare.

Thanks,

Ada

I have attached the code.test.mod (1.2 KB)

2

Your timing for capital is still wrong in some equations.

3

Hi,

I am having an issue with Blanchard Kahn Condition. There are three types of agent in my model with their own budget constraint. I have one aggregate resource constraint. Due to Walras law one of them is redundant. When, I simulate the model by removing household or bank budget constraint ,I get simulation results but they are not same. Ideally these results should be same. But when I remove aggregate resource constraint or Entrepreneur budget constraint, I get error related to Blanchard Kahn condition. I am not able to figure out why this happening. Any help would be appreciated. I have checked and the model written satisfies Walras law on paper. Paper_Estimate.mod (4.8 KB)

4

Your code returns an indeterminacy problem, not a singularity/collinearity issue. So Walras law is the reason, but rather a timing (or linearization) error somewhere. I would recommend working with a nonlinear model as it will be less error-prone.