Rank condition is verified and BK's is not

Stochastic simulations
1

Hi everyone,

I am not understanding how is it possible that the model presents the same number of eigenvalues as forward-looking variable and yet the BK condition isn’t verified. The model_diagnostics(M_,options_,oo_) points the presence of collinearity. How is it the right way to interpret this problem?

There are 10 eigenvalue(s) larger than 1 in modulus
for 10 forward-looking variable(s)

The rank condition is verified.

Error using print_info (line 32)
Blanchard & Kahn conditions are not satisfied: no stable equilibrium.
ModelOpenBiV1.mod (15.8 KB)

2

That’s because you messed with the qz_criterium. It should be 1-1e-6, not 1e-6.
Run ModelOpenBiV1.mod (15.7 KB)

3

Thanks a lot Professor!