Dynare forums

Hi everyone.

During running my model with Dynare, I faced with error message, precisely warning sign.

Despite the warning, model run and present IRF in baseline model.

However, when I added one equation to test policy experiment, model does is not solved and show error message related to indeterminacy and BK condition.

So, please let me know how to handle this problem. Maybe I have to change my model or some parameter when calibrating.

Thank you.

Byoungho

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There are 8 eigenvalue(s) larger than 1 in modulus
for 8 forward-looking variable(s)

The rank condition is verified.

Warning: Matrix is close to singular or badly scaled.
Results may be inaccurate. RCOND = 4.436369e-019. > In dr1 at 396
In resol at 128
In stoch_simul at 42
In bankcapital_simple_0905_mr at 344
In dynare at 132
In gobank at 1

The warning message is not necessarily critical, though it may signal a problem with your model and/or calibration.

In the second case where you add an equation, you said that BK conditions are violated: search the forum for various examples of how to deal with that issue.

Please post your MOD file if you want more detailed answers.

Best