If we have inf or 0 in steady state values of a DSGE model, can we say that something is wrong?
for example number of eigen values less than 1 should be equall to the state variables and number of jumpers should be equal to the eigen values higher than 1.But what we can say about 0 or inf in steady state values?
0 steady state values are nothing uncommon. They are the standard in linearized models.
In contrast, infinite steady state values are a problem, because your model solution is not bounded.
I excuse me for my question. I mean 0 or inf in eigenvalues of a DSGE model. What we can say about them ? For example suppose that we have 0 or inf in eigenvalues of a DSGE model. Can we say these is something wrong or these is a problem in our model? In some DSGE models we have inf in eigenvalues of a DSGE model.
No, the generalized eigenvalues of 0 and infinity do not contain useful information.