Major Identification Issue|rank of H and J deficient

Dear All,

I am trying to estimate a two country DSGE model (see attached). And I have major identification issues which I am not able to solve. Since the parameters are naturally correlated. Does this mean I have to remove them from the model? I have run the model with mode-compute=6 and 9.
Maybe the dataset is not good or detailed enough because I am working with monthly data since I have incorporated migration framework. Additionally, I still have to work on the initial values of parameters. However, focusing only on this type message meaning pairwise collinearity+parameters being collinear with respect to others, how would I solve it?
I have read all of the posts on the forum and the literature on the identification. Still, I am not sure how to solve it.
I would appreciate any feedback.

Thank you so much!
nkmj6m.mod (6.4 KB)

You cannot fix the steady state values outside of the model block if they depend on estimated parameters. See Remark 4 (Parameter dependence and the use of model-local variables) in Pfeifer(2013): “A Guide to Specifying Observation Equations for the Estimation of DSGE Models”