Blanchard Kahn conditions are not satisfied: indeterminacy

[Lautaro2453]

Hello,

I'm new using Dynare. I'm working in a calibrated DSGE model.

I have the next message error:
_______________________________________________________________________
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 Tesis_MaestriaL1v4 (line 1345)
info = stoch_simul(var_list_);
Error in dynare (line 180)
evalin('base',fname) ;
_______________________________________________________________________

I understand that we can't have more eingenvalues larger than 1 in modulus than forward looking variables. The point is that in the log I have the same amount of eigenvalues larger than 1 in modulus than forrward looking variables.

This is the log message:
_______________________________________________________________________
There are 15 eigenvalue(s) larger than 1 in modulus
for 15 forward-looking variable(s)

The rank condition ISN'T verified!
_______________________________________________________________________

Why the rank condition is not satisfied if we have the same amount of eigenvalues larger than 1 in modulus than forward looking variables?

I attached the mod file.

Thanks for your time and help, kind regards. Lautaro

[jpfeifer]

It is about the rank condition, not the BK conditions:

Error using print_info (line 54)
One of the eigenvalues is close to 0/0 (the absolute value of numerator and denominator is smaller than 1e-06!
If you believe that the model has a unique solution you can try to reduce the value of qz_zero_threshold.

As model_diagnostics says:

model_diagnostic: the Jacobian of the static model is singular
there is 1 colinear relationships between the variables and the equations
Colinear variables:
w_barhat
c_hat
i_hat
psi_zhat
P_k
H_hat
k_barhat
k_hat
q_hat
m_barhat
E
zeta_h
Upsilon
z_tildestar
rk_hat
Colinear equations
38 39 40 55 56 57 58

The presence of a singularity problem typically indicates that there is one
redundant equation entered in the model block, while another non-redundant equation
is missing. The problem often derives from Walras Law.

You need to find out where the singularity comes from.

[Lautaro2453]

Perfect, thank you very much for your quick answer.