# Two sectors NK model

**URL:** <https://forum.dynare.org/t/two-sectors-nk-model/16923>\
**Category:** Steady state\
**Created:** [12 November 2020 12:54 UTC](https://forum.dynare.org/t/two-sectors-nk-model/16923 "2020-11-12T12:54:42Z")\
**Posts on this page:** 1\
**Showing post:** 2

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**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\
**Post date:** [12 November 2020 19:25 UTC](https://forum.dynare.org/t/two-sectors-nk-model/16923/2 "2020-11-12T19:25:07Z")

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See

> [@The Jacobian is singular but Dynare still gives me results](https://forum.dynare.org/t/the-jacobian-is-singular-but-dynare-still-gives-me-results/14874/5):
>
> 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.

Fixing this in [Model\_T2.mod](https://forum.dynare.org/uploads/short-url/oI2Ppwmy1AWb1MgKZn5eJA0Zq9d.mod) (4.1 KB) results in only one collinear relationship. Maybe that will help. Could it be that you are trying to pin down nominal levels that are not determinate in NK models?

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