First order looks ok (I think). When I set order to 2, I get the following. Can someone check the attached file and let me know how to go about it? I in the first order I also get LAMBDAR and lambda greater than 5.

Model1_DynarF.mod (8.6 KB)

Warning: Matrix is close to singular or badly scaled. Results may be inaccurate. RCOND =

1.712298e-21.

In dyn_first_order_solver (line 292)

In stochastic_solvers (line 262)

In resol (line 103)

In stoch_simul (line 92)

In Model1_DynarF.driver (line 473)

In dynare (line 293)

At QuasiTriangular.cc:142:Matrix is not quasi-triangular

Error using mexErrCheck (line 41)

Error encountered in: gensylv.

Error in dyn_second_order_solver (line 92)

mexErrCheck(‘gensylv’, err);

Error in stochastic_solvers (line 270)

dr = dyn_second_order_solver(jacobia_,hessian1,dr,M_,…

Error in resol (line 103)

[dr,info] = stochastic_solvers(dr,check_flag,M,options,oo);

Error in stoch_simul (line 92)

[~,info,M_,options_,oo_] = resol(0,M_,options_,oo_);

Error in Model1_DynarF.driver (line 473)

[info, oo_, options_, M_] = stoch_simul(M_, options_, oo_, var_list_);

Error in dynare (line 293)

evalin(‘base’,[fname ‘.driver’]) ;