Indeterminacy

Dynare help (legacy posts)
1

Please I am working on a simple NK model with Rotemberg pricing (but have two AR(1) process, gov’t spending and transfer payments). I log-linearized and used matlab to calculate the steady state but anytime I run the code it says B-K condition not satisfied (rank condition). I have attached the file. I will appreciate your help.

Thanks
trial_multiplier.mod (3.96 KB)

2

Check your equations. It seems as if equations 2 and 10 might have wrong signs. Also, your timing for bonds b seems to violate the Dynare timing convention. See the manual and dozens of posts in the forum.