Dynare forums

Dear all

I have faced a problem. I took a mod from this forum, more specifically viewtopic.php?f=1&t=2986, Boja_SOENK.mod which is quite workable. Then I checked the mod against the original paper and found two small mistakes in the mod. What I found were following.

In the original Boja mod(line 104), mc_h = (sig/(1-h))*(c-h*c(-1))+vphi*l-z_h+gam2*(1-gam1)*v+gam1*mu;
I changed it to mc_h = (sig/(1-h))*(c-h*c(-1))+vphi*l-z_h-[/color]gam2*(1-gam1)*v+gam1*mu;, (only sign before gam2) following appendix 5, equation 5.8, original paper.

In the original Boja mod(line 142), q = psi+(1-gam2*(1-gam1))*v-gam1*mu;
I changed it to q = psi-[/color](1-gam2*(1-gam1))*v-gam1*mu; (only sign after psi), following appendix 5, equation 5.19, original paper.


After these correction, Dynare gives an error, saying that

There are 4 eigenvalue(s) larger than 1 in modulus
for 5 forward-looking variable(s)

The rank conditions ISN'T verified!

??? Error using ==> print_info at 42
Blanchard Kahn conditions are not satisfied: indeterminacy

Error in ==> stoch_simul at 71
print_info(info, options_.noprint);

Error in ==> Boja_SOENK at 346
info = stoch_simul(var_list_);

Error in ==> dynare at 120
evalin('base',fname) ;

It seems that the first correction doesn't have any effect. But the second one changes everything when I make the corrections one by one.
Help help me out here. Thank you in advice.

Please find necessary files attached.