I have tried to build moodel based on a few equations from another model in which I have added
some others. When I try to run the model I get some error messages form Dynare, and
it seems like that the problem is that there is some kind of problem with a colinear variable - in this
case “e” which is the nominel exchange rate.
When running the model I get the following message:
Configuring Dynare …
[mex] Generalized QZ.
[mex] Sylvester equation solution.
[mex] Kronecker products.
[mex] Sparse kronecker products.
[mex] Local state space iteration (second order).
[mex] Bytecode evaluation.
[mex] k-order perturbation solver.
[mex] k-order solution simulation.
[mex] Quasi Monte-Carlo sequence (Sobol).
[mex] Markov Switching SBVAR.
Using 64-bit preprocessor
Starting Dynare (version 4.5.4).
Starting preprocessing of the model file …
Found 17 equation(s).
Computing static model derivatives:
- order 1
Computing dynamic model derivatives:
- order 1
- order 2
Processing outputs …
MODEL_DIAGNOSTICS: The Jacobian of the static model is singular
MODEL_DIAGNOSTICS: there is 1 colinear relationships between the variables and the equations
10 11 12 15
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.
Error using print_info (line 54)
One of the eigenvalues is close to 0/0 (the absolute value of numerator and denominator is smaller than 1e-06!
If you believe that the model has a unique solution you can try to reduce the value of qz_zero_threshold.
Error in stoch_simul (line 100)
print_info(info, options_.noprint, options_);
Error in NK_GM05_HJ (line 261)
info = stoch_simul(var_list_);
Error in dynare (line 223)
I have tried a lot of things in order to deal with the problem without any success yet. I thought that someone in this forum might be able to spot what the problem is and how I can deal with it.
I have attached the modfile: NK_GM05_HJ.mod (5.6 KB)
I hope that you are able to help me.