Dynare forums

My program does not work because Blanchard Kahn conditions are not satisfied: indeterminacy due to rank failure.

However, when I run model_diagnostics, nothing is printed out. Does anyone has any idea about this?

Thanks.

Is your steady state correct? You have

PI 0.395807

while

Code: Select all

PIbar      = 1.016200;    % steady state inflation

Even accounting for the logarithm, this is very different.