Hello,
I have two country model which run perfectly with independent monetary policies, but when im trying to run the model with a single monetary policy in order to have a monetary union(the taylor rule contains the weighted average of output and inflation of both countries), the following message appears:
[i][i]There are 19 eigenvalue(s) larger than 1 in modulus
for 20 forward-looking variable(s)
The rank conditions ISN'T verified![/i][/i]
Someone can help me please, because i got stuck now? Here the mod file;
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THE RANK CONDITION PROBLEM for MONETARY UNION
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THE RANK CONDITION PROBLEM for MONETARY UNION
by sanga » Sun Aug 10, 2014 12:53 pm
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- sanga
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Re: THE RANK CONDITION PROBLEM for MONETARY UNION
by jpfeifer » Sun Aug 10, 2014 2:54 pm
Please search the forum. There have recently been other users who had the same problem and were able to solve it.
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Re: THE RANK CONDITION PROBLEM for MONETARY UNION
by sanga » Sun Aug 10, 2014 4:30 pm
Thanks! Jpeifer
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