I am having trouble with simulating shocks in my model. I am able to find the steady state but I get the error message “Matrix is singular to working precision.” I do not know the correct way to approach this problem and would appreciate any help!
thesisdynare4.mod (6.7 KB)
model_run4.m (3.1 KB)
calibration4.m (2.5 KB)
0*(R/Rstar) = 0*((R(-1))/Rstar)^(rhor)*((pit/nairu)^(rhopi)*(Y/Y(-1))^(rhoy))^(1-rhopi)*epsilonmp;
How is that equation
0=0 supposed to help you determine equilibrium?
With this equation, I was attempting to turn off the monetary policy shock and isolate the TFP shock. Is there a better way to only observe one shock at a time within a model?
Set the shock standard deviation to 0. What you did here is shut off the monetary policy rule.
I have properly set off the shock by setting the standard deviation of the shock to be equal to 0. However, I still have the issue of “Matrix is singular to working precision.” I noticed that although I am able to compute the steady state numerically, some of the residuals of the equation are not equal to 0. Could this be the issue? What is the common approach to addressing the “Matrix is singular to working precision” issue? Thank you!
thesisdynare4.mod (6.8 KB)
I have seemed to resolve the issue. For anyone who is reading this in the future, the way that I fixed this issue was by running model_diagnostics(M_,options_,oo_) in the Matlab command window. The issue for this specific model was to label the correct variables as predetermined_variables. I hope this can be helpful!