I get the following error in steady;check;
eigenvalues is is close to 0/0
However if I don’t run the check command, I am still get results, but now with the following error:
Warning: Matrix is close to singular or badly scaled. Results may be inaccurate. RCOND = 1.128133e-024. > In dr1 at 707 In resol at 147 In stoch_simul at 66 In max21 at 203 In dynare at 120
It says results maybe inaccurate. May I know what is the solution to this? It has something to do with parameter values I suppose, for example ,my discount factor is close to 1 and exogenous shock is on the order of 1x10^-7
But how do I know exactly which parameter is causing the problem? I wonder if there is a diagnostic toolbox for dynare.