I am trying to replicate the paper written ng Harrison (2012). I used a medium-scale model to replicate his paper. Upon performing the simulation I received the below error
There are 3 eigenvalue(s) larger than 1 in modulus
for 4 forward-looking variable(s)
The rank condition ISN’T verified!
warning: Problem in the model specification: some variables don’t appear as current. Check whether this is desired.
warning: called from
check_model at line 21 column 5
stoch_simul at line 92 column 1
driver at line 255 column 27
dynare at line 281 column 5
error: Blanchard & Kahn conditions are not satisfied: indeterminacy.
error: called from
print_info at line 32 column 5
stoch_simul at line 120 column 5
driver at line 255 column 27
dynare at line 281 column 5
model_diagnostics
error: ‘M’ undefined near line 38, column 38
error: called from
model_diagnostics at line 38 column 10
I knew that M is define in the model by Equation 2 and wondering why I am getting that error.
EAPBSP.mod (3.5 KB)
Thanks,
Aris