Dynare forums

Hi, everyone.

I was running a DSGE model based on dynare. But I am trapped by the following error:
There are 5 eigenvalue(s) larger than 1 in modulus
for 5 forward-looking variable(s)

The rank condition is verified.

Initial value of the log posterior (or likelihood): -100000001.6102
Error in computing likelihood for initial parameter values
??? Error using ==> print_info
Blanchard Kahn conditions are not satisfied: indeterminacy

Error in ==> initial_estimation_checks at 27
print_info(info)

Error in ==> dynare_estimation at 249
initial_estimation_checks(xparam1,gend,data);

Error in ==> test at 204
dynare_estimation(var_list_);

Error in ==> dynare at 26
evalin('base',fname) ;

The main problem is the first one concerning B-K condition. I've search the forum and find a lot of posts on this issue. However, there are only ambiguous solutions generally [code][/code]saying that there maybe some problems with the model specification. And I can hardly figure out how to determine the problematic equation and how to fix it thereafter.

HELP! Thanks in advance!

Code: Select all

//Government fiscal constraint£¨²ÆÕþÔ¼Êø£©
b(+1)=r+1/beta*(b-pih+(1-beta)*(tau-y)+CSS/BSS*(g-tau));//·½³Ì£¨14£©


looks strange. If b is bonds, you are violating Dynare's timing convention (see the manual on how to treat predetermined variables like capital or bonds).

jpfeifer wrote:

Code: Select all

//Government fiscal constraint£¨²ÆÕþÔ¼Êø£©
b(+1)=r+1/beta*(b-pih+(1-beta)*(tau-y)+CSS/BSS*(g-tau));//·½³Ì£¨14£©


looks strange. If b is bonds, you are violating Dynare's timing convention (see the manual on how to treat predetermined variables like capital or bonds).

Thank you for locating the problematic equation for me. I've already fixed it!

xiang8482890 wrote:

jpfeifer wrote:

Code: Select all

//Government fiscal constraint£¨²ÆÕþÔ¼Êø£©
b(+1)=r+1/beta*(b-pih+(1-beta)*(tau-y)+CSS/BSS*(g-tau));//·½³Ì£¨14£©


looks strange. If b is bonds, you are violating Dynare's timing convention (see the manual on how to treat predetermined variables like capital or bonds).

Thank you for locating the problematic equation for me. I've already fixed it!

Can you please post the final version of your dynare code?
Thanks in advance.

Andrea