I add a new country in a two-country cash-in-advance model which I successfully get the result. Yet I find "The rank conditions ISN'T verified!" after the modification. By mistakenly put another similar variable ostar(-1) rather than nspur(-1) in line 39, the condition was met. That does not make much sense to me. Can anyone help me figure out the reason why such error occurs? Please see the attached mod file. Many thanks!
There are 8 eigenvalue(s) larger than 1 in modulus
for 6 forward-looking variable(s)
The rank conditions ISN’T verified!
dynare:k_order_perturbation: Caught Kord exception: NaN or Inf asserted in first order derivatives in FirstOrder::solve
Error using mexErrCheck (line 41)
Error encountered in: k_order_perturbation.
Error in k_order_pert (line 40)
Error in stochastic_solvers (line 65)
[dr,info] = k_order_pert(dr,M_,options_,oo_);
Error in resol (line 118)
[dr,info] = stochastic_solvers(dr,check_flag,M,options,oo);
Error in stoch_simul (line 76)
[oo_.dr,info,M_,options_,oo_] = resol(0,M_,options_,oo_);
Error in issuemoney (line 231)
info = stoch_simul(var_list_);
Error in dynare (line 120)
issuemoney.mod (2.55 KB)