Two country model- BK condition not verified

Hi all,
I am currently working on a two country model extended by a 3 equation NK model. The two countries have the same setup and are related with a UIP equation. However, the BK condition does not verified as the warning message hits. it usually happened with a timing line problem. I suspect there might be a problem lies in IS curve which augmented with nominal exchange rate gap, but can not figure it out. Does anyone can give me some idea?
Also attached with the model mod.

Best

Victor
two_country_nk.mod (9.5 KB)

Hard to tell. Have you looked at dynare.org/wp-repo/dynarewp029.pdf?

Hi Johannes,

Thanks for your kindly advise. I would have a look then.

Best

Victor