# Taylor rule and euler equation collinear

**URL:** <https://forum.dynare.org/t/taylor-rule-and-euler-equation-collinear/27434>\
**Category:** Stochastic simulations\
**Created:** [13 April 2025 13:42 UTC](https://forum.dynare.org/t/taylor-rule-and-euler-equation-collinear/27434 "2025-04-13T13:42:27Z")\
**Posts on this page:** 1\
**Showing post:** 2

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [13 April 2025 14:43 UTC](https://forum.dynare.org/t/taylor-rule-and-euler-equation-collinear/27434/2 "2025-04-13T14:43:55Z")

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You did not provide the external functions to run the code. Most likely the issue is related to:

> [@The generalized Schur (QZ) decomposition failed. For more information, see the documentation for Lapack function dgges: info=15, n=13. You can also run model\_diagnostics to get more information on what may cause this problem](https://forum.dynare.org/t/the-generalized-schur-qz-decomposition-failed-for-more-information-see-the-documentation-for-lapack-function-dgges-info-15-n-13-you-can-also-run-model-diagnostics-to-get-more-information-on-what-may-cause-this-problem/26805/3):
>
> An important first step is usually to drop the price level variables (which have a unit root) and then replace them by inflation rates and real variables. Your model currently has a unit root that gives rise to a collinearity warning. It makes debugging harder. In any case, you should try to set up the model without additional features like stock prices or fancy monetary policy. Just get a simple version of the model to run and then add the desired features.

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