by kyri82 » Wed May 23, 2012 1:59 pm
You have 3 unit-roots!! You are doing something very wrong! Make sure that:
- You solved and linearised the model correctly, as well as the values and ratios at steady-state. One way to verify this is to compute some values at the steady state and make sure they are positive, like the marginal utility of consumption, langrange multipliers, and quantities like consumption, output...
- The timing of your variables is correct. This can be very important actually.
- You have chosen your parametres well and with care.