Hope you re doing well. I am trying to do a perfect foresight simulation of an OLG model but I cannot find the source of the problem. I suspect that it might be a timing issue (for example the timing of the bond interest rate) but I am not sure. Model diagnostics do not report any problem with the mod file.
Just to give an idea, when I want to implement a policy change e.g. reduction in the labour tax rate from 0.13 to 0.12 simulation fails (matrix is singular or some complex numbers are produced)
Thank you for your reply. I worked a bit on the timing of the model and I managed to solve some of its issues. I can find a perfect foresight solution and convergence and my IRFs make sense. However I still get these warnings about Jacobian’s matrix singularity even thought there are no other obvious problems. So my question is: should i trust the results coming out of this deterministic simulation or not? I attach the mod file if helps.