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)
[quote]MODEL_DIAGNOSTICS: The Jacobian of the static model is singular
MODEL_DIAGNOSTICS: there is 1 colinear relationships between the variables and the equations
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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.