I am running the program to do the Ramsey analysis, Now it reports the error"Blanchard Kahn conditions are not satisfied: no stable equilibrium". I refer to the materials and know that maybe there are multiple steady states. I have tried different initial values,but it doesn’t work. I don’t know how to solve the problem, could you please help me to find out the problem and resolve it?Many thanks.
ptx6jp.mod (9.1 KB)
Does the model work when you close it yourself instead of having a Ramsey planner set the instrument? Maybe there is a good economic reason for what you observe.
yes, the model woks well when I close the Ramsey planner, It can run normally, so I am confused why the BK condition is violated. My instrument is tax, whether this is relevant to this reason?
Maybe there is a reason the planner optimally chooses an explosive solution with your instrument. It may have to do with the setup.