I construct a large two-country DSGE model, and want to solve it by dynare 5.2. I use ‘model_diagnostics’ command. The initial code is
codeJ.mod (7.3 KB)
. In this code, dynare can solve the model, and there is no any problems. However, when I replace the initial value by new steady state value
codeJ_copy.mod (7.6 KB)
, ‘model_diagnostics’ shows:
MODEL_DIAGNOSTICS: The Jacobian of the static model is singular
MODEL_DIAGNOSTICS: there is 1 colinear relationships between the variables and the equations
Colinear variables:
p_md
Colinear equations
18 21 22 23
MODEL_DIAGNOSTICS: The presence of a singularity problem typically indicates that there is one
MODEL_DIAGNOSTICS: redundant equation entered in the model block, while another non-redundant equation
MODEL_DIAGNOSTICS: is missing. The problem often derives from Walras Law.
I don’t know why the replacement of initial value can lead to this problem. How can I deal with this problem? Could you help me? Thanks a lot!