Collinear equations

Dynare help (legacy posts)
1

Good Morning,

I am working with a model that has several types of consumption: consumption of Ricardian agents; consumption of non-Ricardian agents; domestic consumption; foreign consumption; and these last two are split between Ricardian and non-Ricardian agents.

Because of this, some equations are collinear. Is there any procedure to solve this? Or have I to work these aggregate equations?

regards,

2

Unless there are unit roots involved in your model, there should not be collinearity in the first place. It would imply that some variables cannot be determined in your model.