Hi,
I have a quite simple model (see below) that I wanna run on dynare, but there are only 3 eigenvalues larger than 1 for 4 forward-looking variables. How can I solve that problem?
thanks for any hints!
var pi, y, r, u, v, r2, r3;
varexo e;
parameters beta, k, phi_pi, phi_y, phi_v, sigma, lamda;
beta=0.99;
sigma=2;
phi_pi=1.5;
phi_y=0.1;
lamda=0.6;
k=0.02;
phi_v=0.95;
model;
pi=betapi(+1)+ky;
r=phi_pipi+phi_yy+v;
v=phi_vv(-1)+e;
(1-lamda)u+y-lamday(-1)=0;
r=sigma(u(+1)-u)+pi(+1);
-sigmau=r2-sigmau(+1)-pi(+1)-r(+1);
-sigmau=r3-sigmau(+1)-pi(+1)-r2(+1);
end;
initval;
pi=0;
y=0;
r=0;
v=1;
e=0;
u=0;
r2=0;
r3=0;
end;
check;
shocks;
var e; stderr 0.009;
end;
stoch_simul(periods=2000,irf=100);