Hi, I am working on a simple version of Bergin(2000), but my model doesn’t satisfy the rank condition. I don’t understand why.
"There are 3 eigenvalue(s) larger than 1 in modulus
for 3 forward-looking variable(s)
The rank condition ISN’T verified!"
The mod file is attached.
Could anyone help me?
Bergin_No_MS_simple.mod (1.72 KB)