Hi dear all,

I run my dsge model with a cost channel in dynare based on matlab codes for optimal policy under discretion and commitment (Soderling, 1999). I get that under commitment, there is singularity, while under discretion this is not the case.

I was wondering how is that possible since it is the same model.

What am I missing?

Thanks a lot.

X.

You need to provide more details. What is the exact error message?

The exact error message is:

Error using ComItAlg (line 87)

Zkt or Stt is singular

Error in NKM_optimalpolicy_2 (line 122)

[ M_Commit,C_Commit ] = ComItAlg( A,B,Q,R,U,beta,n1,n2,1.0 );

Do you want to attach the codes?

Thanks in advance

But the error is not in a Dynare function. I am not sure we can help.

Thank you prof.Pfeifer.

Yes, the error is not in a Dynare function.

I just wondering why might this happens (I search for a theoretical reason).

Sorry if my post is irrelevant.

X.

As we don’t know how you exactly solve the model or what the error message refers to, it is impossible to tell. Is there a reason you don’t use Dynare?

I just wanted to test these codes because the article that I rely on…work with these codes.

I am afraid you are on your own then.