# There are more eigenvalues \> 1 in modulus

**URL:** <https://forum.dynare.org/t/there-are-more-eigenvalues-1-in-modulus/14875>\
**Category:** Replication Attempts\
**Created:** [12 December 2019 09:51 UTC](https://forum.dynare.org/t/there-are-more-eigenvalues-1-in-modulus/14875 "2019-12-12T09:51:29Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![watung](https://forum.dynare.org/letter_avatar_proxy/v4/letter/w/dec6dc/32.png) [@watung](https://forum.dynare.org/u/watung)\
**Post date:** [12 December 2019 09:51 UTC](https://forum.dynare.org/t/there-are-more-eigenvalues-1-in-modulus/14875/1 "2019-12-12T09:51:29Z")

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I’m trying to replicate a NK model with wage stickiness as in the Costa’s book, but now without log-linearizing it. I converted infinite sums as in the optimal wages & prive level equations into recursives. However, this gives me error “There are 6 eigenvalue(s) larger than 1 in modulus for 5 forward-looking variable(s).”

I searched for similar error and have indication that it might be due to “timing convention” issue. However I have no clue as to which variable to be shifted one-period in which equation and direction?

Enclosed the mod file.  
[costa01.mod](https://forum.dynare.org/uploads/short-url/pqshzWOBdawPRfmW1mdRmLOSbEW.mod) (1.6 KB)

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**Author:** ![apauli](https://forum.dynare.org/user_avatar/forum.dynare.org/apauli/32/6844_2.png) [@apauli](https://forum.dynare.org/u/apauli)\
**Post date:** [12 December 2019 15:37 UTC](https://forum.dynare.org/t/there-are-more-eigenvalues-1-in-modulus/14875/2 "2019-12-12T15:37:26Z")

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Are they using the same parameters values ?

You will notice that if you increase phi or theta, you don’t have this problem anymore.

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**Author:** ![bdombeck](https://forum.dynare.org/user_avatar/forum.dynare.org/bdombeck/32/8576_2.png) [@bdombeck](https://forum.dynare.org/u/bdombeck)\
**Post date:** [13 December 2019 20:40 UTC](https://forum.dynare.org/t/there-are-more-eigenvalues-1-in-modulus/14875/3 "2019-12-13T20:40:35Z")

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If you remove the qz\_threshold option you specified the model diagnostics will tell you there are some collinearity issues with equations 7, 8, 9, 10. These are lines 33-36. Substituting the factor prices (W and R) in to your equation for what I think is MC=marginal cost of course gets you exactly the production function, hence the singularity: you have entered exactly the same equation twice.

Your initval block also has two expressions for T and P\_star, lines 54/64 and 55/65, respectively. I’m not sure that this will be a problem, but it might be worth fixing.