Forward looking and rank condition

Dynare help (legacy posts)
1

Hi everyone,

I run my model and get the below first error that have seen in the previouse posts but what explained before the error does not match with it (I think), plus three more errors.

There are 2 eigenvalue(s) larger than 1 in modulus
for 2 forward-looking variable(s)

The rank condition is verified.

??? Error using ==> print_info at 46
Blanchard Kahn conditions are not satisfied: indeterminacy due to rank failure

Error in ==> stoch_simul at 81
print_info(info, options_.noprint);

Error in ==> ch at 404
info = stoch_simul(var_list_);

Error in ==> dynare at 120
evalin(‘base’,fname) ;

Please let me know if you have any idea in this case?
I have 7 backward looking and 2 forward looking variables in the model.

Cheers.

2

Please post the mod-file

3

Please find the mod file attached.
Cheers,

4

If you type model_diagnostics(M_,options_,oo_) Dynare says:

[quote]model_diagnostic: the Jacobian of the static model is singular
there is 2 colinear relationships between the variables and the equations
Relation 1
Colinear variables:
cp
wp
ip
f
B
b
Relation 2
Colinear variables:
cp
wp
ip
f
B
b
Relation 1
Colinear equations
Columns 1 through 17

 3     4     5     6     7     8     9    12    13    15    16    18    21    22    24    25    26

Columns 18 through 22

27    28    29    30    34

Relation 2
Colinear equations
Columns 1 through 17

 3     4     5     6     7     8     9    12    13    15    16    18    21    22    24    25    26

Columns 18 through 22

27    28    29    30    34

[/quote]

Hence, there is a problem with collinearity. While this might be expected from having a unit root in the model, you might additionally have a problem with Walras Law.