Hi everyone, I’ve tried to include government in a small-open economy DSGE model, but it seems that Blanchard and Khan conditions are not satisfied and there is a colinear variable (s=nominal exchange rate):

MODEL_DIAGNOSTICS: there is 1 colinear relationships between the variables and the equations

Colinear variables:

s

Colinear equations

Columns 1 through 22

```
1 2 3 5 6 7 8 9 10 11 12 13 14 15 17 18 19 20 22 23 24 25
```

Columns 23 through 25

```
26 27 28
```

I would like to know how can I proceed in finding where is the mistake in the model, as it can be related to parametrization or model definition. bayesianVeraoRank.mod (5.3 KB)