How can I solve a model with indeterminacy?
I am not sure if dynare can handle it. But I think it's possible we start from one steady state, and end in another steady state. It' s especially common in open economy model. If dynare cannot do it, what are the other possible solutions? Thanks!
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solution to a model with indeterminacy?
by superztt » Wed Nov 25, 2015 3:20 pm
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Re: solution to a model with indeterminacy?
by jpfeifer » Thu Nov 26, 2015 8:49 am
I think you are confusing indeterminacy of the model solution in the Blanchard-Kahn sense with having a unit root in the model. The latter is easily handled by Dynare (e.g. via the diffuse_filter in estimation). The former is curently not supported. See https://github.com/DynareTeam/dynare/issues/111
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