Hello,everyone!

this is another version of my last code,it contains homogeneous firms.(so it is a simpler one) . I have run the last code sucessfully, but failed in this code.

The error message is :"Warning: Matrix is singular to working precision. "

Could anyone help me ? Thank you in advance!

onlybs.mod (3.57 KB)

model_diagnostics says

[quote]MODEL_DIAGNOSTICS: The Jacobian of the static model is singular

MODEL_DIAGNOSTICS: there is 1 colinear relationships between the variables and the equations

Colinear variables:

G

T

Colinear equations

1 2 3 4 6 7 8 9 10 11 12 13 14 15 17 18 19 20 21 22 23 24 25 26 27 28 29

MODEL_DIAGNOSTICS: The presence of a singularity problem typically indicates that there is one

MODEL_DIAGNOSTICS: redundant equation entered in the model block, while another non-redundant equation

MODEL_DIAGNOSTICS: is missing. The problem often derives from Walras Law.[/quote]

My hunch is that Ricardian equivalence holds in your model so that debt and lump sum taxation are equivalent, but your are trying to determine them separately.