Rank condition is not verified

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Rank condition is not verified

Postby jefcost » Mon Nov 17, 2014 11:48 am

I am running a medium sized model, but I am getting the error message about my model not respecting the rank condition.

I get the answer that I have a colinearity problem, due to the Walras Law, because of an equation when I run "model_diagnostics(M_,options_,oo_)".

I am calibrating four additional parameters so I would like to know if the rank condition error could also be because of a calibration problem.
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Re: Rank condition is not verified

Postby jpfeifer » Mon Nov 17, 2014 2:32 pm

It can only be an issue of parameters if the parameter selection you currently use implies that a variable essentially vanishes from the model. That is highly unlikely (usually happens if you set a parameter to 0 to shut off a particular model feature)
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Johannes Pfeifer
University of Cologne
https://sites.google.com/site/pfeiferecon/
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