Problem with Blanchard and Kahn condtions and with stoch_simul

Steady state
1

Hi! I am considering a three-agent model with hand-to-mouth, workers and capitalists and so far it’s ok. Now, I am adding capital to the model and problems appear. I thought it was a problem with calibration but I realized that the problem is that the model is not closed and I am not able to understand how to close it.
tanktentativo.mod (5.2 KB)

Here the errors:
Error using print_info (line 32)
Blanchard & Kahn conditions are not satisfied: indeterminacy.

Error in stoch_simul (line 120)
print_info(info, options_.noprint, options_);

Error in tanktentativo.driver (line 349)
[info, oo_, options_, M_] = stoch_simul(M_, options_, oo_, var_list_);

Error in dynare (line 281)
evalin(‘base’,[fname ‘.driver’]);

Thank you very much in advance
Marco

2

And before adding capital, my model was:
tankcw.mod (1.4 KB)

3
  1. I get an instability error with your code. Did you upload the latest version?
  2. Are you sure it’s not a matter of calibration, particularly the fiscal rules? If I put delta=0.05 the model runs. Maybe you can spot the issue if you move it closer to the intended value. There seem to be oscillations happening.