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Hello all,

When running my model I have the problem that "There are 10 eigenvalue(s) larger than 1 in modulus for 6 forward-looking variable(s)". Once I run the command "model_diagnostics(M_,options_,oo_)" I get that there is one colinear relationship in my model's equations. What does that exactly mean and where could the error be?
The full message below. Thanks!

Kyriacos

model_diagnostic: the Jacobian of the static model is singular
there is 1 colinear relationships between the variables and the equations
Colinear variables:
c1
n1
k1
y1
i1
a1
b1
mi1
lamda1
phi1
cT1
cN1
yT1
yT_I1
yN1
kT1
kN1
nT1
nN1
ksi1
pi1
zita1
tau1
c2
n2
k2
y2
i2
a2
b2
mi2
lamda2
phi2
cT2
cN2
yT2
yT_I2
yN2
kT2
kN2
nT2
nN2
ksi2
pi2
zita2
tau2
Colinear equations
Columns 1 through 11

1 2 3 4 5 6 7 8 9 10 11

Columns 12 through 22

12 13 14 15 16 17 18 19 20 21 22

Columns 23 through 32

23 24 25 26 27 28 31 32 35 36

Often it means that one equation is redundant/implied by others, mostly due to Walras Law. There are quite a few posts on this issue. However, considering that you are missing 4 forward looking variables and that your model is large, I think there is something fundamentally wrong. Check again

1. If your model is correct (considering its size there may a problem be hidden here)
2. If you entered all model equations correctly
3. If the timing of the state variables is correct

Thanks, I am working on it...

Hi guys,

How can one go about the issue of solving the problem of collinearity ?