Hello.

I have been using the code in:

to simulate the SOE in Galí (2015) chapter 8.

Now I am trying to simulate the model with the versions of the IS curve and NKPC which are dependent on the output level instead of the outputgap. See my mod file.

chap8.mod (3.3 KB) .

However this gives me the errorcode:

Warning: Matrix is singular to working precision.

In evaluate_steady_state (line 261)

In steady_ (line 55)

In steady (line 80)

In sim.driver (line 299)

In dynare (line 293)

Residuals of the static equations:

Equation number 1 : NaN : y

Equation number 2 : NaN : pi_h

Equation number 3 : NaN : 3

Equation number 4 : NaN : pi

Equation number 5 : NaN : r_real

Equation number 6 : NaN : s

Equation number 7 : NaN : a

Equation number 8 : NaN : z

Equation number 9 : NaN : 9

Equation number 10 : NaN : nx

Equation number 11 : NaN : 11

Equation number 12 : NaN : y_star

Equation number 13 : NaN : yhat

Equation number 14 : NaN : p_h

Equation number 15 : NaN : p

Equation number 16 : NaN : p_f

Equation number 17 : NaN : q

Equation number 18 : NaN : er

Equation number 19 : NaN : i

Error using print_info (line 32)

The steady state has NaNs or Inf.

Error in steady (line 102)

print_info(info,options_.noprint, options_);

Error in sim.driver (line 299)

steady;

Error in dynare (line 293)

evalin(‘base’,[fname ‘.driver’]) ;

What am I doing wrong?

Kind regards