Blanchard-Kahn conditions, an error message
Posted: Thu Oct 29, 2009 9:25 pmHi,
I try to replicate a model from Cespedes et al(2000). The model with flexible exchange rate works rather well but the model with fixed exchange rate does not work at all. If I run the code (estim6.mod, here attached) I have an error message:
There are 4 eigenvalue(s) larger than 1 in modulus
for 4 forward-looking variable(s)
The rank conditions ISN'T verified!
How is it possible that the rank condition is not verified if the number of non-predetermined variables equals the number of eigenvalues greater than one?
What was my mistake?
Please help me, it is really important for me.
Thank you in advance,
Oxana
I try to replicate a model from Cespedes et al(2000). The model with flexible exchange rate works rather well but the model with fixed exchange rate does not work at all. If I run the code (estim6.mod, here attached) I have an error message:
There are 4 eigenvalue(s) larger than 1 in modulus
for 4 forward-looking variable(s)
The rank conditions ISN'T verified!
How is it possible that the rank condition is not verified if the number of non-predetermined variables equals the number of eigenvalues greater than one?
What was my mistake?
Please help me, it is really important for me.
Thank you in advance,
Oxana