Dynare forums

Dear jpfeifer,
I change my model to omit the law of motion for labor from the model. Now dynare shows that there are 3 eigenvalues and 2 forward looking variables, and when I use the "model_diagnostics(M_,options_,oo_)" command, it does not show any thing! Does it mean that there are some co-linear variables in the model? If yes, how can I find that witch variables are co-linear? Could you please advise me?
Thank you a lot.
Here is my model:

Code: Select all

var     y_o  y_T   i_o  i_T  c   a_o  a_T   t  w_o  w_T  w  l  r_o  r_T  l_o  l_T  b   k_o  k_T  g  y_oil; 
varexo  e_o  e_T  e_oil  e_g  e_b;
parameters  y_oil_bar  y_o_bar  y_T_bar  c_bar  i_o_bar  i_T_bar  l_o_bar  l_T_bar  l_bar  k_o_bar  k_T_bar
  r_o_bar  r_T_bar  w_o_bar  w_T_bar  w_bar  g_bar  betaa   rho_o  rho_T  rho_oil  rho_b 
 rho1  rho2  rho3  alphaa   deltaa   thetaa  ethaa  gamaa  rho_g ;
betaa   = 0.99;
alphaa  = 0.34;
deltaa  = 0.02;
ethaa   = 1.003;
thetaa   = 0.4;
rho_o   = 0.8;
rho_T   = 0.89;
rho_oil = 0.82;
rho_g   = 0.9 ;
rho1    = 0.13 ;
rho2    = 0.13 ;
rho3    = 0.15 ;
rho_b   = 0.9 ;
gamaa   = 1.9 ;
y_oil_bar = 10.56 ;   
y_o_bar   = 11.88 ;   
y_T_bar   = 9.29 ;   
c_bar     = 11.4154 ; 
t_bar     = 8.68 ; 
k_o_bar   = 13.59 ; 
k_T_bar   = 11.54 ;   
r_o_bar   = 1.9 ;           
r_T_bar   = 1.9 ;           
i_o_bar   = 10.77 ;   
i_T_bar   = 8.92 ;     
g_bar     = 10.1344 ;
l_o_bar   = 25.9106 ;     
l_T_bar   = 23.2081 ;   
l_bar     = 49.1187 ;
w_o_bar   = 9.8854 ;       
w_T_bar   = 7.2679 ;       
w_bar     = 17.1533 ;

model (linear);
c   = w ;
b   = t - c ;
c = betaa/ethaa * r_o_bar *c(+1)*r_o(+1) ;
r_o = r_T ;
k_T = 1/ethaa*((1-deltaa) * k_T(-1) + i_T_bar/k_T_bar* i_T) ;
k_o = 1/ethaa*((1-deltaa) * k_o(-1) + i_o_bar/k_o_bar* i_o) ;
b = rho_b * b(-1)+ e_b ;
l_bar*l = l_o_bar*l_o +l_T_bar*l_T ;
w_o = y_o - c -l_o ;
r_o = y_o - c -k_o ;
y_o = a_o + thetaa * k_o + (1-thetaa) * l_o ;
w_T = y_T - c -l_T ;
r_T = y_T - c -k_T ;
y_T = a_T + alphaa * k_T + (1-alphaa) * l_T ;
y_oil = rho_oil * y_oil(-1) + e_oil ;
g   = rho_g * g(-1)   + rho3*y_oil(-1) + e_g ;
a_o = rho_o * a_o(-1) + rho1*y_oil(-1) + e_o ;                                                               
a_T = rho_T * a_T(-1) + rho2*y_oil(-1) + e_T ;                                                                 
y_T = t ;   
y_o = 1/y_o_bar*(c_bar*c + i_o_bar*i_o + i_T_bar*i_T - y_oil_bar*y_oil + g_bar*g);                                                                                                                                         
w_bar*w = w_o_bar*w_o + w_T_bar*w_T ;
end;

steady;
check;

shocks;
var e_o   ;  stderr 0.11;
var e_T   ;  stderr 0.062;
var e_oil ;  stderr 0.21;
var e_g   ;  stderr 0.08;
var e_b   ;  stderr 0.13;
 var e_T , e_oil = 0.000245;
 var e_o , e_oil = -0.000511;
var e_oil , e_g = 0.0103;
end;

stoch_simul(order=1, irf=30, periods=120 , graph_format = pdf);


No, if it does not show anything, there is most likely a timing error somewhere in your model. Usually, the best way to proceed is to strip down the model to the most basic version that is working and start rebuilding from there.

jpfeifer wrote:No, if it does not show anything, there is most likely a timing error somewhere in your model. Usually, the best way to proceed is to strip down the model to the most basic version that is working and start rebuilding from there.

Thank you very much for your help.
And one another question, I think I found the problem, but there is no c and t in the IRF graphs again!
I would appreciate it if you could give me some advice.
thank you in advance.

If all variables except for a few show up in IRFs, it means that those variables are flat and do not move. If they are supposed to move, there still is a mistake in the model.

Thank you very much,
I will check it again.
Can a mistake in the model lead to this error that there are 3 eigenvalues and 2 forward looking variables?
thanks.

Yes, of course.