I am using dynare to solve a simple RBC model with recursive preferences. The mod file is attached. I believe there is nothing wrong with the model because when do a stochastic simulation, with stoch_simul, there are no errors. Nevertheless, we a try to do a deterministic simulation, with simul, a get the following message:

Simulation terminated with NaN or Inf in the residuals or endogenous variables. There is most likely something wrong with your model.

Error in simul (line 126)

sim1;

Error in ezBasic (line 188)

simul();

Error in dynare (line 182)

evalin(‘base’,fname) ;

Using model_diagnostic, I get:

model_diagnostic: the Jacobian of the static model is singular

there is 1 colinear relationships between the variables and the equations

Colinear variables:

C

K

R

M

V

U

Colinear equations

1 2 3 4 6 7

What could be the problem?

ezBasic.mod (1.03 KB)