Hi steve_1983,
More than with the exogenous processes, model_diagnostics indicates the issue might be related with redundant equations and aggregation.
For example, that the bond market clears, like your equation 16 states:
B = 0;
is usually implied by the agent’s first-order conditions and the assumption of a balanced government budget.
See also my answer at Generalized Schur (QZ) failed and other useful answers on this topic on the forum.
>> model_diagnostics(M_,options_,oo_)
MODEL_DIAGNOSTICS: The Jacobian of the static model is singular
MODEL_DIAGNOSTICS: there is 2 colinear relationships between the variables and the equations
Relation 1
Colinear variables:
c
c_h
c_r
k
w
b
lambda
mu
zi
y
m
cost
tr
mf
r
inv
Relation 2
Colinear variables:
c
c_h
c_r
k
w
b
lambda
mu
zi
y
m
cost
tr
mf
r
inv
Relation 1
Colinear equations
12 14 15 16 18 19 21
Relation 2
Colinear equations
14
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.