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Code Help Indeterminacy

PostPosted: Mon Sep 17, 2012 11:32 am
by Gregor
Hello everybody.
I would like to ask you for help with my dynare code. I've developed a two sector two country model. Since I cannot solve it due to indeterminacy problem (BK conditions verified but indeterminacy due to rank failure), I want to solve firstly a two sectors-one country version. Unfortunately, I am facing the indeterminacy problem also with this reduced model : There are 5 eigenvalue(s) larger than 1 in modulus
for 6 forward-looking variable(s)

The rank conditions ISN'T verified!
Could anyone take a look at my code and give me some hints? I am guessing that the home sector represents the source of indeterminacy.It could be caused either by the choice between deposits and fixed assets used in the home production or the labor choice . Or mybe it is just poor choice of parameters? Any sugegstions?
Thanks in advance
Gregor

Ps. the stst values in the dynare code, declared as parameters are of course the values for level-variables.

Re: Code Help Indeterminacy

PostPosted: Mon Sep 17, 2012 3:13 pm
by jpfeifer
Usually it is a problem with the timing of the endogenous variables.

Re: Code Help Indeterminacy

PostPosted: Mon Sep 17, 2012 5:30 pm
by Gregor
jpfeifer, thx a lot for your quick reply. You were right. I've made a mistake in the timing of the rate on deposits.