Blanchard Kahn conditions are not satisfied: no stable equil

[sujee2sujee]

I am trying to estimate a small open economy model based on Gali and Monacelli (2005). I could solve the model. But, when I try to estimate the model I get the following error message.
Error using ==> print_info at 40
Blanchard Kahn conditions are not satisfied: no stable equilibrium

Error in ==> initial_estimation_checks at 69
print_info(info, DynareOptions.noprint)

Error in ==> dynare_estimation_1 at 169
oo_ = initial_estimation_checks(objective_function,xparam1,dataset_,M_,estim_params_,options_,bayestopt_,oo_);

Error in ==> dynare_estimation at 70
dynare_estimation_1(var_list,dname);

Error in ==> mycodebay at 273
dynare_estimation(var_list_);

Error in ==> dynare at 120
evalin('base',fname) ;

I am new to DSGE modeling and Dynare. Can anyone help me to correct this error? Files are attached

mycodebay.mod

(4.17 KiB) Downloaded 87 times

sldata.xls

(23.5 KiB) Downloaded 169 times

[costa]

Usinge model diagnostics, there are colinear variables in the model:

>> model_diagnostics(M_,options_,oo_)
model_diagnostic: the Jacobian of the static model is singular
there is 1 colinear relationships between the variables and the equations
Colinear variables:
e
sle_obs
Colinear equations
1 3 5 6 7 8 12 14

[sujee2sujee]

Thank you Costa for your suggestion. I managed to coorect it and the code is running now. I have been struggling with this problem for 2 weeks. Thank you for saving my time.

SUjee2sujee

[mb_roma]

Hi,
I have the same problem with the same model. Using the comand model_diagnostic i have found one collinear relationship with e and many equation. I think the problem involve the relations of terms of trade, nominal exchange rate and real exchang rate. "sujee2sujee" how did you solve the problem of collinear relation?

[Alkebulan]

Hey sujee2sujee,
Could you say a few words about how you fixed the problem? I am struggling with the same issue. Thanks.