Dear professor jpfeifer,
I am working on a DSGE mod file, but it runs into some problems that I can’t solve. model_diagnostics indicates that the Jacobian of the static model is singula and there is 8 colinear relationships between the variables and the equations. Many of the colinear equations are exogenous processes and AR(1) processes, I can’t understand why these processes can be colinear ralationships.
Colinear equations
12
Relation 2
Colinear equations
8
Relation 3
Colinear equations
33 34 39 48 54
Relation 4
Colinear equations
33 34 39 52 54
Relation 5
Colinear equations
33 34 39 48 52 54
Relation 6
Colinear equations
33 34 39 48 54
Relation 7
Colinear equations
33 34 39 48 52 54
Relation 8
Colinear equations
34 39 48 52 54
equation 8 log(iff)=(1-rhof)log(iff_ss)+rhoflog(iff(-1))+e_f;
equation 33 log(Yw)=(1-rhoW)log(Yw_ss)+rhoWlog(Yw(-1))+e_W;
equation 34 log(pi_W)=(1-rhopiw)log(piW_ss)+rhopiwlog(pi_W(-1))+e_piw;
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.
- Is the DSGE model I am working on has unit roots?
- why exogenous processes and AR(1) processes can be colinear ralationships?
- Is the problem steming from one redundant equation entered in the model block, while another non-redundant equation is missing?
any advices will be great for me,
Thank you very much, professor.
Kcapital20200629.mod (20.8 KB) capitaldata20200629.xlsx (13 KB)