Trouble in finding the steady state

Stochastic simulations
1

Dear professor,
When I run my mod,there is a trouble.I checked for a long time but couldn’t solve it.
“One of the eigenvalues is close to 0/0 (the absolute value of numerator and denominator is smaller than 0.0000!
If you believe that the model has a unique solution you can try to reduce the value of qz_zero_threshold.”
What’s wrong with my mod?Is there something wrong with my model?
the mod file as follows:TwoAgents.mod (3.2 KB)
thanks.

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2

Hi Rong,

I would suggest only doing the exp() transformation once the model runs, could be that there is a mistake somewhere there.
Also, using diagnostics I can see that you have a singularity problem:

MODEL_DIAGNOSTICS: The Jacobian of the static model is singular
MODEL_DIAGNOSTICS: there is 1 colinear relationships between the variables and the equations
Colinear variables:
c_w
c_e
n
eta
r
rk
inv
k
pi
pistar
x_1
x_2
y
d
mc
q
ir
c
w
lamb
profit
sp
Colinear equations
16 23

DYNARE_SOLVE (solve_algo=2|4): number of blocks = 6
DYNARE_SOLVE (solve_algo=2|4): solving block 5, of size 1
DYNARE_SOLVE (solve_algo=2|4): solving block 4, of size 1
DYNARE_SOLVE (solve_algo=2|4): solving block 3, of size 20
DYNARE_SOLVE (solve_algo=2|4): solving block 2, of size 1
DYNARE_SOLVE (solve_algo=2|4): solving block 1, of size 1
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.

You should investigate these two things further, hope this helps.

1 Like
3

It looks your timing for capital is not consistent. It’s only sometimes predetermined.

1 Like
4

Thanks for your reply.
Is the singularity problem caused by the model setting? as I am new to DSGE,I will check my model again. Thank you very much.

5

i will check my model again.thanks for your reply.

6

@jpfeifer @DoubleBass
Sorry to bother you again.I corrected a model error,and it works,.but only with [solve_algo = 2 stoch_simul(order=1)].If i change these options,it does not work again.Does this mean my model still has something wrong?
the Modified mod file as follows:
TwoAgents.mod (3.2 KB)
Thanks!!!

7

Your steady state still looks strange. I could not agree more with @DoubleBass

1 Like
8

I follow your advice and find another mistake.it finally works! what a amazing dynare！

9

I am glad that it works now :slight_smile: