Hi everyone,

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:

AUX_EXO_LEAD_1386

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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