Limited Participation Model

[magonfru]

Hi all, I am trying to develop a limited participation model that has households firms and banks. For this I need to set some expressions in the first order conditions as expectation(-1)(), however, this causes the model to crash. Now it states
Error using print_info (line 48)
Blanchard Kahn conditions are not satisfied: indeterminacy due to rank failure
Error in stoch_simul (line 98)
print_info(info, options_.noprint, options_);
Error in banks_cia_lpm (line 308)
info = stoch_simul(var_list_);
Error in dynare (line 180)
evalin('base',fname) ;

However when I set expectation(0)() the model runs perfectly.

I have faced the rank problem before and is usually that I typed an equation wrong, specially in timing, now not a clue.
Does anyone have faced this problem before?
Best
Mario

[jpfeifer]

Your setup is equal to

Code: Select all

  aux=c(+2)^(-sigma);
lam=betti*(aux(-1))/(1+pi(+1));


This timing looks weird.