Strange problem with Blanchard-Kahn conditions

[George]

Hello!

I am trying to estimate a small DSGe model and I just encountered a problem that some more of uas have faced in the past given some previous posts.
Dynare reports that the number of "explosive" eigenvalues is equal to the number of forward-looking variables in the model and that the rank condition is verified but then immediately after that an error message is returned saying that the Blanchard-Kahn conditions are not satisfied and there is no stable equilibrium!

How can this be? And how can one overcome this problem?

Thanks for any feedback on the issue!

[Dave]

Hi George,

See Paolo's reply to my question posted on Aug 15, 2008.

Kind regards,
Dave

[George]

Dear Dave,

Thanks for your reply to my question. What Paolo has written is of course very much sensible, indeed the initial values must be such that a unique and stable equilibrium exists.
Now,I have exactly 2 explosive eigenvalues for exactly 2 forward-looking variables based on the initial values that I have given and that should be enough for Dynare to conclude that the BK condition is satisfied. Yet,it does not say so.
Am I missing a point here?

George