I know that indeterminacy is in most cases due to timing problems. I’ve a working model in the style with credit friction. it works well.
If I index the debt to inflation to introduce a nominal debt channel I get a Blanchard & Kahn indeterminacy error. That goes away if I assign more weight to past inflation in the Taylor rule.
What the economic intuition behind this behavior be?
My guess is that there is a debt deflation channel at work, but it is hard to tell. Your model sounds rather specific.