Dynare forums

Dear professor jpfeifer:
When I run the shiyan.mod file in dynare, there is a trouble I don't know how to solve it. The
error information coming up with the following message:


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

The rank conditions ISN'T verified!

Error using print_info (line 46)
Blanchard Kahn conditions are not satisfied: indeterminacy due to rank
failure

Error in stoch_simul (line 81)
print_info(info, options_.noprint);

Error in shiyan2 (line 198)
info = stoch_simul(var_list_);

Error in dynare (line 120)
evalin('base',fname) ;

Thank you very much for your help!
Best wishes!

the mod file as follows:

First of all

z1=rho_z1*z1(-1)+e_z1;
z1=rho_z2*z2(-1)+e_z2;

does not seem to be right. I guess it should be z2 on the second line.

Second, your timing for the capital stock is wrong. See the manual on Dynare's timing convention for predetermined states. But given that you seem to have two sectors, this will be more complicated than usual. You need to decide whether each of the individual capital stocks is predetermined, but the capital stocks can flow freely between sectors or whether capital used in each sector needs to be decided upon one period in advance and within the period a friction prevents capital from moving from one sector to the other one.

Dear professor jpfeifer:
Thank you very much for your help！Under the guidance of you，the problem has been solved. In equation z1=rho_z2*z2(-1)+e_z2;z1 should be z2.In fact, we have considered two sectors, there is something with the timing for the capital stock, we have changed it. You remind us------“the capital stocks can flow freely between sectors or whether capital used in each sector needs to be decided upon one period in advance and within the period a friction prevents capital from moving from one sector to the other one.” This is a very constructive suggestion，which give me a very important enlightenment.
Thank you very much for your help and support again!
Best wishes for you!
Yang