Eigenvalues more than forward looking variables

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Eigenvalues more than forward looking variables

Postby Elle211 » Thu Apr 28, 2016 8:47 pm

Dear all,
I'm new with Dynare and I'm trying to solve a very easy DSGE model.
The equations should be correct but Dynare says that Blanchard Kahn condition is violated because there 6 eigenvalues and only 5 forward looking variables.
How can I find and solve the problem?
I look forward to your reply.
Thank you in advance.
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Re: Eigenvalues more than forward looking variables

Postby jpfeifer » Fri Apr 29, 2016 9:09 am

Are you sure your timing is correct? You define k to be predetermined, i.e. you want to use the beginning of period stock notation. But
Code: Select all
k = lambda10*(k(-1)-muastar(-1)) + lambda11*(inv+muastar);

seems to use the end of period stock notation.

Pro-tip: it is best practice to define composite parameters as model local variables using the pound operator. That way the mod-file will allow for estimating the model.
------------
Johannes Pfeifer
University of Cologne
https://sites.google.com/site/pfeiferecon/
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