I have been trying to simulate monetary shocks on Dynare, but getting the error “Blanchard & Kahn conditions are not satisfied: indeterminacy”, because the rank condition isn’t satisfied. I’m not sure if it’s a problem with the model or with the initial values.
PS: It’s based on Gali’s chapter 3 model, using \alpha = 1. NK.mod (976 Bytes)
Thanks in advance!