I tried to write the Gali & Monacelli (2005) small open economy model in levels. The attached the code. However, I encountered the error “The Jacobian of the dynamic model contains Inf. For more information, use options_.debug.” Could anyone help me check where the problem is?
Any help is highly appreciated. Thanks in advance.soe.mod (3.0 KB)
MODEL_DIAGNOSTICS: The Jacobian of the static model contains Inf or NaN. The problem arises from:
Derivative of Equation 4 with respect to Variable s (initial value of s: 1)
Derivative of Equation 9 with respect to Variable s (initial value of s: 1)
Derivative of Equation 10 with respect to Variable s (initial value of s: 1)
Looking at the equation, you have
(s^(1-eta))^(1/(1-eta)) which is a limit the computer cannot compute. See your old post at Error message: The Jacobian contains Inf or NaN
Thanks for your reply. I have modified the calibrated values. The error message “The Jacobian of the static model contains Inf or NaN.” has gone, however, I got the error “The generalized Schur (QZ) decomposition failed”. Could you please help me check where the problem comes from?
Thank you very much. Here attached the code.soe2.mod (2.6 KB)
Now you have a collinearity problem that was hidden before. Run
model_diagnostics to see the issue.