I have a model that works well for some parameters. However, I frequently receive the following Warnings for some parameter changes:
-> Warning 1: “Warning: Matrix is close to singular or badly scaled. Results may be inaccurate.” RCOND = 3.246774e-18.
It is a deterministic model with simul(periods=3000,maxit=30);
I receive the Warning above repeatedly. The RCOND continues to fall until 2.295887e-41. After this point, the warning changes to
-> Warning 2: “Warning: Matrix is singular to working precision.”
I can usually circumvent these warnings with different guesses for the steady state and changing the way in which the model equations are written. However, there is a parameter that I need to increase, but that I could not find a solution. I also want to write the equations of the model in a more robust way.
My questions are:
In which moment of the Dynare processing I receive the warnings above. Is it because Dynare cannot find the transition path, at the simul() command?
If I use “exp(x)” instead of “x” for the endogenous variables, will it smooth the equations in a way that I do not receive these Warnings?
If I linearize the more complex equations of the model, will it solve the problem?