Question about the Blanchard Kahn conditions

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Question about the Blanchard Kahn conditions

Postby jefbref » Sun May 19, 2013 9:43 pm

I have read most of posts dealing with the indeterminacy and the non respect of the Blanchard Kahn conditions but I wish you can help me with one precision since I have the number of my explosive eigenvalues equal to the forward looking variables but I still meet the indeterminacy error message. I understand that I might have a redundant equation because of the Walrass Law, but would I get the number of explosive eigenvalues equal to the forward looking variable if I was having this problem?

Is the number of explosive eigenvalues equal to the forward looking variables is all what is needed to validate the Blanchard Kahn conditions? if yes, is it normal that I still get the indeterminacy error message?
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Re: Question about the Blanchard Kahn conditions

Postby jpfeifer » Mon May 20, 2013 8:01 am

You need the Blanchard Kahn AND the rank condition to be satisfied. Dynare shows you the result of both. Judging from your post, you have a problem with the rank condition.
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Johannes Pfeifer
University of Cologne
https://sites.google.com/site/pfeiferecon/
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Re: Question about the Blanchard Kahn conditions

Postby jefbref » Wed May 22, 2013 9:22 am

Thank you jpfeifer.
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