Perfect foresight model failed

[sharaaaee]

Hi, I’m new to dynare and trying to use dynare to solve a deterministic model. However I faced a problem. Please help.

Simulation of the perfect foresight model failed!Switching to a homotopy method…
Homotopy not implemented for purely backward models!
Failed to solve the model!
Return with empty oo_.endo_simul.

period60906.mod (3.8 KB)

[jpfeifer]

Your model does not feature forward-looking variables and therefore is purely backward looking. Is that intended? The problem seems to be that the model does not satisfy the Blanchard-Kahn conditions and is explosive.

[sharaaaee]

Thank you for advice. But my model failed to simulation. Am I not reflecting your advice properly? How to solve this problem?
period60909.mod (3.8 KB)

[jpfeifer]

See e.g.

Blanchard & kahn conditions

There is a unique timing convention. The question is not whether you can change the timing, but rather which timing is the unique correct one. In Dynare, as capital is predetermined, K(+1) is entered as K as it is decided at time t. The costate is determined at the same time and thus has the same timing.