Dear Dynare Team,

I am very new to dynare, so I apologize for my question being basic.

I tried to write down the simplest possible NK model with capital.

Even when I start extremely close to the steady state, I get a warning

“Warning: Matrix is close to singular or badly scaled. Results may be inaccurate. RCOND = 1.614805e-19.”

trysimplest.mod (3.1 KB)

And the steady state can’t be computed.

Any hint on what I am doing wrong would be appreciated.

Thank you very much and many greetings