A general question . Trying to understand how to solve the collinear eq issues in Dyn, after model_diagnostics(M_,options_,oo_)
Dynare says equations 1, 2, 4 and 5 are collinear. To my understanding this implies at least 2 equations are equivalent. Below are the equations I just replicated from a paper. How could these equations be collinear?
@jpfeifer thanks. Yes there are (but it is a NK so a unit root is a feature) . I ended up with a generalized Schur (QZ) decomposition failure. have been been trying to understand which equations and timing issues could be responsible (I run : model_diagnostics(M_,options_,oo_). ) but I am not sure yet.Please see the attached
@jpfeifer I reduced the model to a much simpler version but still facing this error I cannot spot (One of the eigenvalues is close to 0/0 (the absolute value of numerator and denominator is smaller than 0.0000!) I reviewed all equations for any possible timing error but still. OilModel0.mod (5.5 KB)
Thanks a lot Peifer,
after simplifying the model into one sector I was able to address the issue. I later added one more sector. Everything looks alright, except that one Eigen value shows Inf (I checked the timing, all look ok). I read in one of your responses in the forum that it is generally not a problem.
While order 1 works fine, order 2 results in mismatching between #eigenvalue(s) larger than 1 in modulus and forward-looking variables (11 for 9). I guess that means there are still issues with the timing. How come? I think it has to do with the way capitals are treated? Model1_Twosect.mod (6.3 KB) Model1_TwosectSS.m (3.6 KB)
@jpfeifer . When getting NaN for only the Mean and at order 2, what does mean? Order 1 has no issues and impulse functions (for both order 1 and 2) always die out .
APPROXIMATED THEORETICAL MOMENTS (HP filter, lambda = 1600)
VARIABLE MEAN STD. DEV. VARIANCE
Y 2.0091 0.0388 0.0015
IO NaN 0.0019 0.0000
INO NaN 0.0138 0.0002
CO NaN 0.0035 0.0000
CNO NaN 0.0253 0.0006
YO 1.0015 0.0181 0.0003
YNO 1.0053 0.0227 0.0005
You can verify in the displayed eigenvalues that there are three unit roots in your model. The reason is you trying to endogenously compute the steady state with the steady_state-operator for things that cannot be endogenously determined. See
Thank a lot. I dropped Infl in the SS operator, but It did not bring a difference, I noticed that for the 4 variables where the mean is NaN (i.e CO, CNO / IO INO) their correlation coefficient with C and I is 1. On the other hand, their expressions contains P (a non-stationary variable) as you can see in the file I sent earlier.