Hi friends,
I can run my model, bur appear 4 errors:
Error using print_info (line 52)
One of the eigenvalues is close to 0/0 (the absolute value of
numerator and denominator is smaller than 1e-6)

Error in check (line 76)
print_info(info, options.noprint);

Error in MODEL (line 318)
oo_.dr.eigval = check(M_,options_,oo_);

Error in dynare (line 120)
evalin(‘base’,fname) ;

I can’t slove these errors. please help me to solve these problems. Untitled2.m (820 Bytes) MODEL.mod (2.24 KB)

[quote]model_diagnostic: the Jacobian of the static model is singular
there is 4 colinear relationships between the variables and the equations
Relation 1
Colinear variables:
c
r
pi
w
l
lt
kt
mct
pit
lg
kn
mcn
pin
nou
x
tx
pix
mcx
rer
im
tim
piim
mcim
i
k
y
Relation 2
Colinear variables:
lt
kt
lg
kn
x
tx
rer
im
tim
i
k
y
Relation 3
Colinear variables:
lt
kt
lg
kn
x
tx
rer
im
tim
i
k
y
Relation 4
Colinear variables:
lt
kt
lg
kn
x
tx
rer
im
tim
i
k
y
Relation 1
Colinear equations
5 6 10 11 27 29

Relation 2
Colinear equations
5 6 22 25 27 29 36

Relation 3
Colinear equations
5 6 22 25 27 29 36

Relation 4
Colinear equations
5 6 10 11 27 29

The presence of a singularity problem typically indicates that there is one
redundant equation entered in the model block, while another non-redundant equation
is missing. The problem often derives from Walras Law.[/quote]

It means there is a redundant equation and one missing one. This is due to Walras Law. Check your market clearing conditions, one of the equations could be redundant. Also see Colinearities

The trick is to start from a very small model by shutting down a number of equations and try if the code runs. If it does’t fix the error then run the code again and again until it runs. Once it runs, then add one equation at time.

The smaller the model, the easier it is to identify the problem then you build from there.

Am running a two sector model with durable and non durable goods. I want to determine the movement of IRF with different shock at both 1) sticky durables and flexible nondurables prices, 2) equally sticky durables and nondurables prices, and 3) equally flexible durables and nondurable price. I do this by changing the parameter values of Calvo price.

IRFs are generated but across the three alternatives however, the IRFs are one-to-one across the shocks in the model.

My question is: (i) do i achieve the 3 alternatives by changing parameter values which in turns removes adjustment cost (for the case of achieving flexible price sector), (ii) how do I verify that the IRFs generated although they are one-to-one are accurate?

Your assistance is appreciated. Attached herewith is the .mod file.

xi = 0; // Durable consumption adjustment cost
The IRF for c_I visibly changes. Thus, the IRFs are not exactly the same over all cases. If you think that there should be more changes, you should check whether the integration of your integration of the durables sector into the model is correct.

How do you expect the Calvo parameter theta to play a role, if it does not appear in your model?

That there is more wrong in your model is indicated by

[quote]// Production function
y(+1)=a(+1)+omega*d+(1-omega)*n(+1); // Iterated one period forward to satisfy rank condition
[/quote]

Arbitrarily shifting the timing of one equation is NOT a solution to Blanchard-Kahn problems. There is a unique correct timing.