Hello,everyone!
this is another version of my last code,it contains homogeneous firms.(so it is a simpler one) . I have run the last code sucessfully, but failed in this code.
The error message is :"Warning: Matrix is singular to working precision. "
Could anyone help me ? Thank you in advance!
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Matrix is singular to working precision
by Mandy » Sun May 25, 2014 1:33 am
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Re: Matrix is singular to working precision
by jpfeifer » Mon May 26, 2014 5:34 pm
model_diagnostics says
My hunch is that Ricardian equivalence holds in your model so that debt and lump sum taxation are equivalent, but your are trying to determine them separately.
MODEL_DIAGNOSTICS: The Jacobian of the static model is singular
MODEL_DIAGNOSTICS: there is 1 colinear relationships between the variables and the equations
Colinear variables:
G
T
Colinear equations
1 2 3 4 6 7 8 9 10 11 12 13 14 15 17 18 19 20 21 22 23 24 25 26 27 28 29
MODEL_DIAGNOSTICS: The presence of a singularity problem typically indicates that there is one
MODEL_DIAGNOSTICS: redundant equation entered in the model block, while another non-redundant equation
MODEL_DIAGNOSTICS: is missing. The problem often derives from Walras Law.
My hunch is that Ricardian equivalence holds in your model so that debt and lump sum taxation are equivalent, but your are trying to determine them separately.
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