Error when trying to change model setup

I have tried to change the code in an already existing model setup.
But when I try to run the code after making some changes I get the following message:

dynare NK_GM05_HJ.mod

Configuring Dynare …
[mex] Generalized QZ.
[mex] Sylvester equation solution.
[mex] Kronecker products.
[mex] Sparse kronecker products.
[mex] Local state space iteration (second order).
[mex] Bytecode evaluation.
[mex] k-order perturbation solver.
[mex] k-order solution simulation.
[mex] Quasi Monte-Carlo sequence (Sobol).
[mex] Markov Switching SBVAR.

Using 64-bit preprocessor
Starting Dynare (version 4.5.4).
Starting preprocessing of the model file …
Found 20 equation(s).
Evaluating expressions…done
Computing static model derivatives:

  • order 1
    Computing dynamic model derivatives:
  • order 1
  • order 2
    Processing outputs …
    Preprocessing completed.

Error using print_info (line 54)
One of the eigenvalues is close to 0/0 (the absolute value of numerator and denominator is smaller than 1e-06!
If you believe that the model has a unique solution you can try to reduce the value of qz_zero_threshold.
Error in stoch_simul (line 100)
print_info(info, options_.noprint, options_);
Error in NK_GM05_HJ (line 255)

I’m not sure how to deal with this problem. I hope that you can help me.

I have attached the modfile if it is any help.

NK_GM05_HJ.mod (5.3 KB)

What did you change? A better documented version of the Gali/Monacelli paper is at

all the equations which are not assigned an explanation on the right side