Generalized Schur (QZ) decomposition failed - small open economy

Stochastic simulations
1

Hi all.

I am trying to extend a standard small open NK model (the standard model is available here) into a ‘TANK’ model, but matlab shows that generalized Schur (QZ) decomposition failed, I do not know why.
The mod file is attached. Can anyone help me?

tt.mod (2.6 KB)

2

P.S. model_diagnostics shows that there is 3 colinear relationships between the variables and the equations.
MODEL_DIAGNOSTICS: The presence of a singularity problem typically indicates that there is one redundant equation entered in the model block, while another non-redundant equation is missing. The problem often derives from Walras Law.

Relation 1
Colinear equations 8 9 29

Relation 2
Colinear equations 28

Relation 3
Colinear equations 1

But I do not know the logic behind it.

3

Equation 28

bh=bh(-1)+rhob*eb;

will typically imply a unit root in bh. I would be most worried about equations 8 and 9 presumably implying 29. That would suggest that there is indeed an equation missing.

4

You are right, but I intentionally set the unit root of bh. The problem is solved yesterday, the true problem appears on the value of theta, theta=1 implies 1=1, an useless identity.