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)+rhof*log(iff(-1))+e_f;

equation 33 log(Yw)=(1-rhoW)*log(Yw_ss)+rhoW*log(Yw(-1))+e_W;

equation 34 log(pi_W)=(1-rhopiw)*log(piW_ss)+rhopiw*log(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)