I am solving a Ramsey Planner Model.

The private model with simple rules works fine.

For the Ramsey, I take out the rules and obtain the planner’s FOCs. Afterward, I include those equations in the model block in the .mod file.

I use the method outlined in Christiano, Rostagno, Motto (2007) to obtain the Steady State. It works and the errors of static eqs are 0.

Now, I run the model and have the following error message (BK conditions):

```
There are 58 eigenvalue(s) larger than 1 in modulus
for 57 forward-looking variable(s)
The rank condition ISN'T verified!
Error using print_info (line 32)
Blanchard & Kahn conditions are not satisfied: no stable equilibrium.
Error in stoch_simul (line 103)
print_info(info, options_.noprint, options_);
Error in MaPRamseyCoop.driver (line 917)
[info, oo_, options_, M_] = stoch_simul(M_, options_, oo_, var_list_);
Error in dynare (line 293)
evalin('base',[fname '.driver']) ;
```

I run model_diagnostics:

```
>> model_diagnostics(M_,options_,oo_)
MODEL_DIAGNOSTICS: No obvious problems with this mod-file were detected.
```

**What can I do to fix this model?**

I think the problem is that one or more Ramsey Lagrange Multiplier is close to zero (or zero), possibly becoming colinear with another Lagrange multiplier. **Is there any way to know what variables are the troublesome ones?**

I want to remove one of these Lagrange multipliers from the model (if it’s zero it won’t affect the policy lagrangian after all), however, I don’t know what equation to take out (how to pick which Ramsey FOC to remove?). My intuition is that one constraint is irrelevant and could be removed.

In practical terms, I want to take out one variable (the zero-valued LMult) and one equation. But I don’t how to proceed from here.

Other details: I am solving a Ramsey model associated to a three country model. I cannot use the built in Ramsey command because it won’t allow me to solve non-cooperative policy cases and sometimes the Cooperative one also fails to work.

Thanks in advance for any help,

Camilo

Files attached:

MaPRamseyCoop.mod (25.6 KB)

MaPRamseyCoop_steadystate.m (6.3 KB)

find_ss.m (2.6 KB)

MaPCoord_sseqs.m (7.6 KB)

LMultStaticCoop.m (20.2 KB)

(the last three are files used by the _steadystate file).