Ramsey policy

Dynare help (legacy posts)
1

Hello –

I receive the error message “Blanchard Kahn conditions are not satisfied: no stable equilibrium” when executing a ramsey_policy command in the attached mod file.

The model file runs fine under stochastic simulation using the simple rule for the chosen instrument (“tm”) in the attached model. But the error occurs when I delete the simple rule (line 103) and attempt to compare the ramsey policy to these simple rule outcomes.

Is there a known and correctable source of this error, or is the solution potentiually complex. (The model is very large).

Also, the same errors arises when I try to compute a Ramsey optimal monetary policy in the same model by deleting the interest rate rule (line 98) and using the insterest rate {“R”} sa the instrument.

I have included the model and steadystate file.

Thank you for any guidance you can provide.
m_w_cy_rp.mod (6.01 KB)
m_w_cy_rp_steadystate.m (4.29 KB)

2

Dear Puzzled

I have encountered the same problem. have you found a solution?
I have asked about it from jpfeifer and he refered me to michel julliard. but he do not have time to answer me.
Please kindly if you have found the answer inform me about it as well.

best