I am currently trying to simulate a two sector model with the Ramsey planner controlling one instrument.
I had previously made a matlab file for the SS of this model, and it runs correctly.
However, when simulating the model, I get an error related to the Blachard Khan conditions.
I tried the diagnostic command and this is what I get:
evaluate_steady_state: The initial values for the steady state of the following variables are NaN:
MODEL_DIAGNOSTICS: The singularity seems to be (partly) caused by the presence of a unit root
MODEL_DIAGNOSTICS: as the absolute value of one eigenvalue is in the range of ±1e-6 to 1.
MODEL_DIAGNOSTICS: If the model is actually supposed to feature unit root behavior, such a warning is expected,
MODEL_DIAGNOSTICS: but you should nevertheless check whether there is an additional singularity problem.
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.
I don’t really get if there is some problem with the Ramsey setup or with the model itself.
Can you help me clarify this issue, please?
Thank you very much
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