Robot_ramsey2.mod (11.9 KB)
Dear professor,
I am doing a simple two-area model. I want to do the ramsey optimal monetary policy.However, it reports the error “Blanchard & Kahn conditions are not satisfied: no stable equilibrium.” I have tried many methods to figure out it, but I failed. I also to close the ramsey model, and only add a simple rule, it still doesn’t work. Could you help me to solve it? many thanks
Focus on a model where you select the policy rule for now and try to make it run. Usually, there is a timing error somewhere. Finding it may involve starting from a simpler version of the model.