# Ramsey optimal policy SOE model: BK no stable equilibrium **URL:** \ **Category:** Dynare help (legacy posts)\ **Created:** [12 October 2015 09:24 UTC](https://forum.dynare.org/t/ramsey-optimal-policy-soe-model-bk-no-stable-equilibrium/5044 "2015-10-12T09:24:46Z")\ **Posts on this page:** 2\ **Page:** 1
**Author:** ![Philipp](https://forum.dynare.org/letter_avatar_proxy/v4/letter/p/46a35a/32.png) [@Philipp](https://forum.dynare.org/u/Philipp)\ **Post date:** [12 October 2015 09:24 UTC](https://forum.dynare.org/t/ramsey-optimal-policy-soe-model-bk-no-stable-equilibrium/5044/1 "2015-10-12T09:24:46Z")
Dear Forum, I have a small open economy model which works fine when the monetary policy rule is specified. I have solved analytically for the steady state and everything should be ok (See the working model attached). Now I would like to derive the Ramsey optimal policy, however I run into the following error: > [@](#): > > Blanchard Kahn conditions are not satisfied: no stable equilibrium My guess is that this has to do with the initial conditions I give to the model, however I am a bit lost on how to proceed. Any help or comment is greatly appreciated. Best, Philipp [model\_test\_monpol.mod](https://forum.dynare.org/uploads/default/original/2X/a/aa6426d460f1b8fe5654313e8ea932542dd218c7.mod) (6.13 KB) [model\_test\_ramsey.mod](https://forum.dynare.org/uploads/default/original/2X/9/9062bdcad625a56c03f95bd5aa1b3fe9595daad1.mod) (6.19 KB) ---
**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Post date:** [17 October 2015 07:54 UTC](https://forum.dynare.org/t/ramsey-optimal-policy-soe-model-bk-no-stable-equilibrium/5044/2 "2015-10-17T07:54:59Z")
I think you need to understand the economics here. You seem to combine a money growth rate with independent interest setting. Are you sure that this is not inconsistent so that no equilibrium exists?