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.
Many Thanks,
Suty