Stability error model

Stochastic simulations
1

Hi Prof. Pfeifer,
Help me please.
Why there is a stability error for the simplest model of two unrelated regions. I can not understand. The model file is attached.
Thank you,
Leonid.model_2reg.mod (1.4 KB)

2

What is the underlying setup here? The interest rate reacts to the average inflation, but the real interest rate is locally determined?

3

Thanks for your prompt reply, jpfeifer!

4

Hi Prof. Pfeifer,
How can the aggregated value of R be related to the local real interest rates r1 and r2 from the equations for y1 and y2 in the same model [model_2reg.mod]
Thank you,
Leonid

5

As I said, the underlying setup is not clear to me. You as the model builder need to think hard whether the conditions you have here make sense.

6

Thanks for your prompt reply, jpfeifer!