Dynare forums

Good Morning,

I am working with a model that has several types of consumption: consumption of Ricardian agents; consumption of non-Ricardian agents; domestic consumption; foreign consumption; and these last two are split between Ricardian and non-Ricardian agents.

Because of this, some equations are collinear. Is there any procedure to solve this? Or have I to work these aggregate equations?

regards,

Unless there are unit roots involved in your model, there should not be collinearity in the first place. It would imply that some variables cannot be determined in your model.