Dynare forums

I run a Ramsey model with two sectors and permanent deterministic shock. I obtain convergence but before that I get a warning that there is a singular matrix. Does this imply that the results are wrong or not?
The message I get is:

Warning: Matrix is singular to working precision.
> In resol at 116
In check at 46
In bgg_onecons_twogoods_perm at 215
In dynare at 132

EIGENVALUES:
Modulus Real Imaginary

7.707e-017 7.707e-017 0
0.9575 0.9575 0
0.973 0.973 0
1 1 0
1.051 1.051 0
1.081 1.081 0
Inf Inf 0
Inf Inf 0


There are 4 eigenvalue(s) larger than 1 in modulus
for 4 forward-looking variable(s)

The rank condition is verified.

-----------------------------------------------------
MODEL SIMULATION :

1 - err = 1.1717
Time of iteration :0.096
2 - err = 4.1803e-015
Time of iteration :0.012

Total time of simulation :0.16

Convergency obtained.


The code is attached

I think this warning comes from the fact that your model has a unit root: hence the jacobian of the static model is singular (there is an infinity of steady states).

Maybe the result you are getting is correct, but you’d probably better remove the unit root by detrending your model in order to make consistency checks.

Best,