eigenvalues is is close to 0/0

[hewei2004]

Hi,

I get the following error in steady;check;

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eigenvalues is is close to 0/0


However if I don't run the check command, I am still get results, but now with the following error:

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Warning: Matrix is close to singular or badly scaled.
         Results may be inaccurate. RCOND = 1.128133e-024.
> In dr1 at 707
  In resol at 147
  In stoch_simul at 66
  In max21 at 203
  In dynare at 120


It says results maybe inaccurate. May I know what is the solution to this? It has something to do with parameter values I suppose, for example ,my discount factor is close to 1 and exogenous shock is on the order of 1x10^-7
But how do I know exactly which parameter is causing the problem? I wonder if there is a diagnostic toolbox for dynare.

[kyri82]

First, you need to make sure that you solve the model correctly, and that you put it correctly in Dynare. Then, eigenvalue problems can indeed occur in various models and can depend on parameter values, but this can depend on the model. I do not think the discount factor is your problem. What is your model and what utility function do you use?

Kyriacos