Hi Professor, I’m having some difficulties using Dynare to estimate a multi-period OLG model. The system reported an error: ‘Failed to solve perfect foresight model.’ I’m not sure how to address this issue. Is there any effective way to solve it? Thanks for your help!

sol_OLG_c.mod (1.6 KB)

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Your setup does not conform to Dynare’s timing convention. You can see that from

There are 7 eigenvalue(s) larger than 1 in modulus for 16 forward-looking variable(s)

The rank condition ISN’T verified!

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Hi Professor, I have tried modifying my code to avoid timing convention as much as possible. Currently, my steady-state results are good, but I still can’t obtain a satisfactory transition path. Are there any other methods that could help solve this issue? Thanks a lot for your help!

sol_OLG_c.mod (4.4 KB)

The debugging information on your model is

```
sim1: The Jacobian of the dynamic model is singular
sim1: there is 1 collinear relationships between the variables and the equations
Collinear variables:
s_1
s_2
tau
Collinear equations
Equation 1, period 1
Equation 2, period 1
Equation 3, period 1
Equation 7, period 1
Equation 8, period 1
Equation 9, period 1
Equation 10, period 1
Equation 11, period 1
Equation 12, period 1
Equation 13, period 1
Equation 14, period 1
```

That suggests an issue in the model setup.