Dynare forums

I get the following error message from Dynare

"Warning: Matrix is close to singular or badly scaled. Results may be inaccurate. RCOND = 6.644063e-28.
> In dyn_first_order_solver at 217
In stochastic_solvers at 172
In resol at 118
In stoch_simul at 76
In code at 278
In dynare at 120"

The rank condition is however verified. What is this and how do I solve it!!
Thanx.
I attach the mod file

Use

Code: Select all

model_diagnostics(M_,options_,oo_)

to see that your model is highly collinear.