error in steady state and transition, deterministic model

[annie]

I am solving a deterministic growth model with two capital goods. I wrote a matlab code to solve the steady state and a dynare code to solve the transition after a permanent shock. My dynare code get the same steady state as my matlab code. However, the transition path failed with "Warning: Matrix is close to singular or badly scaled. Results may be inaccurate. RCOND = 2.002503e-52."

I then put check after command steady and it gives:
----------------
EIGENVALUES:
Modulus Real Imaginary

0.9696 0.9696 0
1.064 1.064 0
Inf Inf 0
Inf Inf 0
Inf Inf 0


There are 4 eigenvalue(s) larger than 1 in modulus
for 3 forward-looking variable(s)

The rank condition ISN'T verified!

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mod file is attached. could someone please help me? Thanks.

[jpfeifer]

Focus on the Blachard-Kahn problem. There is most probably still a timing problem somewhere (or a mistake in your parameterization)