Dear Professor,

I am trying to replicate a model designed by Ghassane Benmir as a practice of modelling of a two-sector economy and environmental policies but confront the following problem. The diagnostic result show colinearity of production function, FOCs of capital and labor and I cannot figure out the solution. Thanks for your kind help.

The generalized Schur (QZ) decomposition failed. For more information, see the documentation for Lapack function dgges: info=30, n=29. You can also run model_diagnostics to get more information on what may cause this problem.

MODEL_DIAGNOSTICS: The Jacobian of the static model is singular

MODEL_DIAGNOSTICS: there is 2 colinear relationships between the variables and the equations

Relation 1

Colinear equations

14 15 16 17 18 19

Relation 2

Colinear equations

14 15 16 17 18 19

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.

Policy_Rep.mod (7.8 KB)

Policy_Rep_steadystate.m (2.2 KB)

Policy_Rep_steady_state_helper.m (986 Bytes)