The Jacobian is singular but Dynare still gives me results

Hi Prof,

Here is my story…
I wrote a mod file with calibrated parameters. It went well. And I get desired results. Then I tried to estimated my model, but it reports a series of problems.

So I used model_diagnostics. It shows the following

MODEL_DIAGNOSTICS: The Jacobian of the static model is singular
MODEL_DIAGNOSTICS: there is 6 colinear relationships between the variables and the equations

Back to the mod file where there is no estimation, model_diagnostics also gives me the same message…SIX colinear relationship? Aren’t they too many?

And the most strange thing is, even if model_diagnostics tells me that “The Jacobian is singular”, my BK condition is satisfied. There is no unit root at all. What’s more, IRFs, policy functions, and transition functions are well reported.

Why is that? And is there any clue to fix my problem?
I attach my mod file below.

Thanks in advance!

I was trying to estimate my model but the result was

Here is my mod file.
Please help…

You did not provide paramvalue.mat

The example mod file does not need paramvalue.mat
I’m so sorry.
I forgot to delete that line.

Most of the problem comes from your use of

log(Phi) = (1-rho_phi)*log(STEADY_STATE(Phi)) + rho_phi*log(Phi(-1)) + Eps_phi;

The steady state of Phi cannot be endogenously computed, it seems. If you use

log(Phi) = (1-rho_phi)*log(varphi) + rho_phi*log(Phi(-1)) + Eps_phi;

i.e. replace the steady state operator by the steady state you set in the steady_state_model-block, one of the warnings disappears. For the other shock processes, the problem seems to be the same.

Thank you so much! Now no problems are detected!