I’m trying to implement a model with exogenous bond-market segmentation. There are 3 types of agents who can buy only one kind of bond and one unrestricted agent. There are 3 kinds of perpetuites with different duaration plus a short-term bond. The estrange thing is that the model doesn’t work. I get the message: There are 36 eigenvalue(s) larger than 1 in modulus
for 39 forward-looking variable(s)
The rank conditions ISN’T verified!"
However, when I delete the variables ksi_r1(+1), ksi_r2(+1) and ksi_r3(+1) from the equations of the lines 193,194 e 195, the model just work perfectly.
Can anybody help me to understand that?
The file is attached.
Model4.mod (13.3 KB)