Dynare forums

Hi,

I know my model have indeterminacy like Benhabib and Farmer (1996-Indeterminancy and increasing return).

I ran the code in dynare. It gives the steady state values but does not run the impulse response functions.

Can dynare handle model with indeterminacy? Or it always needs to be a single saddle path trajectory?

Thanks

Dynare by default only works with a unique stable saddlepath. However, you can get around this limitation using the trick by Bianchi/Nicolo https://giovanninicolo.wordpress.com/research/