I’m trying to extend Jermann and Quadrini (2012) into a two country model by now considering a case of financial integration (households across both countries are debtholders and equity holders for firms in both countries). I have found the steady state, but the Schur decomposition doesn’t go through. Any advice would be greatly appreciated. At this point in time I’m using V 4.5.7 of Dynare.
Integration_level.mod (3.6 KB)
I cannot spot anything.
model_diagnostics points to a collinear relationship that seems to come from a unit root. Are you sure the solution to your model is unique?
seems like the split between foreign and domestic may be indeterminate.
Thank you Dr. Pfeifer, I’ll refine my theoretical framework.
Three or more points , , , …, are said to be collinear if they lie on a single straight line. . A line on which points lie, especially if it is related to a geometric figure such as a triangle, is sometimes called an axis. Two points are trivially collinear since two points determine a line.