# Indeterminacy of international portfolio

Hi,

I am trying to use Dynare only to get some good initial conditions for a global method solution.
I am solving a two country model and I have the problem of the indeterminacy of the portfolio in ss.

I am trying to feed Dynare a steady state around which I would like a second order approximation (I am choosing one of the possible portfolios). However it complains and I get this

Error using lnsrch1 (line 53)
Some element of Newton direction isn’t finite. Jacobian maybe singular or there is a
problem with initial values

Error in solve1 (line 129)
[x,f,fvec,check]=lnsrch1(xold,fold,g,p,stpmax,func,j1,j2,varargin{:});

Error in dynare_solve (line 130)
[x,info]=solve1(func,x,j1(r(i):r(i+1)-1),j2(r(i):r(i+1)-1),jacobian_flag,

[ys,check] = dynare_solve([M.fname ‘_static’],…

Error in cfg_2nd_order_simple (line 231)

Error in dynare (line 120)
evalin(‘base’,fname) ;

how can I solve this problem? I attach my super simple codes

thanks

elisa
cfg_2nd_order_simple.mod (2.5 KB)

sorry. the code was wrong.
here the correct codes.

now this is the problem:

Error using print_info (line 36)
documentation for Lapack function dgges: info=14, n=12

Error in stoch_simul (line 81)
print_info(info, options_.noprint);

Error in cfg_2nd_order_simple (line 244)
info = stoch_simul(var_list_);

Error in dynare (line 120)
evalin(‘base’,fname) ;
cfg_2nd_order_simple.mod (2.49 KB)

In the most recent snapshot,

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:
kh_1
kf_1
a_1
Relation 2
Colinear variables:
kh_2
kf_2
a_2
Relation 1
Colinear equations
8 9 18 19

Relation 2
Colinear equations
7 10 17 20

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.[/quote]

Good night , sorry for this question but I really want to know in this case how can we deternmine redundant equation and the non redudant one ? WHat does this message mean ? Does it mean in equation 8 for example the colinear variables are kh_1