Indeterminacy (colinear equations)

Dear all,

I am trying to solve a sort of stereotype of small open economy’s DSGE model with bank.

The basic structure of my model as follows ;

Households : consume domestic good and foreign good, supply labour, deposit in bank

Capital Producer : input domestic good and foreign good for capital production, supply capital

Wholesale firm : produce output by using labour and capital, and sell it retail firm
borrow money from bank to acquire capital

Retail firm : purchase intermediate good and resell it to domestic market and export to foreign country

Bank : finance money from households’ deposit(D) and borrow from international financial market(EX)
lend money to wholesale firm(B)

        For the banking sector, 
        I referred  Gerali (2010)  "Credit and Banking in a DSGE Model of the Euro Area"

Central Bank : implement monetary policy

I attached my code, and there are some explanations in the code.

When I run this code,
I get error message “Blanchard Kahn conditions are not satisfied: indeterminacy”
and when I run model diagnostic
I get “colinear equations” among euler equation, UIPC and foreign interest shock equation.

But, to my knowledge, I don’t see what is wrong in my equations.

Could you help me to figure out what makes this problem?

I have been struggling with this matter for last 2 months, please have a look.

Thank you very much.

yoocnoh_basic_1.mod (9.4 KB)

Your model has a unit root, so a collinearity warning is expected. I can only give you the generic advice: recheck your model and in particular your timing. If that does not turn anything up, simplify your model and see when the problem occurs.