There is a problem of dimensions for matrix multiplication at line 5 and 6 :
x1 = (A/tau1)*exp(t/-tau1)
x2 = (A/tau2)*exp(t/-tau2)
If you look at :
A_t = A/tau1
size(A_t)= 0 5
Because A = randn(0.5), but randn(M) returns an M-by-M matrix.
so inside the randn() function, you should select an integer value > 0.
Replace 0.5 by 1 should work.
Then you will have a problem when plotting.
Note that you do not need x1(t) but simply x1.
Finally, either use subplot for both x1 and x2 or use plot for both and see the hold command