If I’m not mistaken, we are supposed to have as many eigenvalues larger than one as we have forward looking variables. I have 5 forward looking variables (both of them are +1), I have 5 eigenvalues greater than one but this message appears :

*Configuring Dynare …

[mex] Generalized QZ.

[mex] Sylvester equation solution.

[mex] Kronecker products.

[mex] Sparse kronecker products.

[mex] Local state space iteration (second order).

[mex] Bytecode evaluation.

[mex] k-order perturbation solver.

[mex] k-order solution simulation.

[mex] Quasi Monte-Carlo sequence (Sobol).

[mex] Markov Switching SBVAR.

Starting Dynare (version 4.4.3).

Starting preprocessing of the model file …

Substitution of endo leads >= 2: added 1 auxiliary variables and equations.

Found 16 equation(s).

Evaluating expressions…done

Computing static model derivatives:

- order 1

Computing dynamic model derivatives:
- order 1
- order 2

Processing outputs …done

Preprocessing completed.

Starting MATLAB/Octave computing.

STEADY-STATE RESULTS:

c 0.326759

r_f 0.01375

w 1.71365

v 0.0578358

l 0.200324

k 3.19604

i 0.079901

y 0.528131

a 1

b 0.85125

d 0.301034

g 0.105626

tb 0.0158439

nd 0

h 1.15228

Residuals of the static equations:

Equation number 1 : 0

Equation number 2 : 0

Equation number 3 : 0

Equation number 4 : 0

Equation number 5 : 0

Equation number 6 : 0

Equation number 7 : 0

Equation number 8 : 0

Equation number 9 : 0

Equation number 10 : 0

Equation number 11 : 0

Equation number 12 : 0

Equation number 13 : 0

Equation number 14 : 0

Equation number 15 : 0

EIGENVALUES:

Modulus Real Imaginary

```
4.613e-017 -4.613e-017 0
1.313e-015 1.313e-015 0
0.904 0.904 0
0.9163 0.9163 0
0.9538 0.9538 0
0.9972 0.9972 0
1.014 1.014 0
1.02 1.02 0
4.695e+017 4.695e+017 0
2.101e+019 2.101e+019 0
Inf -Inf 0
```

**There are 5 eigenvalue(s) larger than 1 in modulus

for 5 forward-looking variable(s)

The rank condition ISN’T verified!

error: Blanchard Kahn conditions are not satisfied: indeterminacy due to rank failure

**error: called from:*

error: c:\dynare\4.4.3\matlab\print_info.m at line 48, column 9

error: c:\dynare\4.4.3\matlab\stoch_simul.m at line 98, column 5

error: c:\dynare\work\incomplete_markets_new.m at line 237, column 6

error: c:\dynare\4.4.3\matlab\dynare.m at line 180, column 1

Where could the problem come from ?

PS : Happy Easter to all of you !