Hi, professor. I am trying to replicate a paper and test its models fitness by finding the variance and covariance between variables. The dynare code is as below:
var y h K i c g A; varexo e; parameters beta delta eta rho phi psi alpha tauF tauY tauC sigmae; beta = 1.05^(-0.25); delta = 1.1^(0.25)-1; eta=1; %estimated by short run dynamic rho=0.9742556389406869; psi=4.3249; phi=5.0327; %baseline value estimated using 2019 data alpha=0.648882898108761; tauC=0.033604937825684; tauF=0.011171237806898; tauY=0.025274387012007; sigmae=0.01; model; (h^(eta))*c=(1-tauY)/(1+tauC)*alpha*(y/h)*(1-phi/(alpha*(1-tauY))*((1+beta*y(+1)/y)*h-h(-1)-beta*y(+1)/y*h(+1))); beta *c/c(+1)*((1 - tauY ) * (1 - tauF ) * (1 - alpha)*(y(+1)/K(+1)) + 1 - delta-psi/2*((i(+1)/K(+1)-delta)^(2))+psi*(i(+1)/K(+1)-delta)*i(+1)/K(+1)) = 1; g=(tauY-tauF)*alpha*y*(1-phi/(alpha*(1-tauY))*((1+beta*y(+1)/y)*h-h(-1)-beta*y(+1)/y*h(+1)))+tauY*y*(1-tauF)*(1-alpha)+tauC*c+tauF*y; y=A*(K^(1-alpha))*(h^(alpha)); K=i+(1-delta)*K(-1); log(A)=(1-rho)*log(A)+rho*log(A(-1))+e; y*(1-phi/2*((h-h(-1))^(2)))=c+i+psi/2*((i/K-delta)^(2))*K+g; end; initval; A= 6.048012046973227e+06; c=6.280727426135292e+10; g=4.640632672723721e+09; h=0.920392639094456; i=1.950059196092336e+10; K=8.086938457501512e+11; y=8.694849889500000e+10; end; shocks; var e= sigmae^2; end; steady; stoch_simul(hp_filter=1600);
Ive got the steady state value results, but I could not proceed to stoch_simul. The warning is:
Error in print_info
One of the eigenvalues is close to 0/0 (the absolute value of numerator and denominator is smaller than 0.0000!
If you believe that the model has a unique solution you can try to reduce the value of qz_zero_threshold.
I did model diagnosis, and the warning is: 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.
But I dont think any of my equations is redundant. I will be really grateful if you can help me out.