Hi, if the steady state values of endogenous variables are negative, what is the economic interpretation?
What type of model are you using? Which variables are negative?
my model is New Keynesian and mc, c, y, n, k, z, x and w are negative.
There must be a fundamental error. How can it be, from a technical point of view (irrespective of negative capital stock and labor effort at all), that an output producing firm produces negative outcome with two negative input factors?
Are you talking about levels or log-levels? The latter can be negative if the level is between 0 and 1
it is about level but I need the economic interpretation not technical
If your level is negative, then your model is wrong.
like the structure of the model is wrong…assuming there is no mistake in entering the model in dynare?
In principle, yes. But usually the model is entered incorrectly (or the parameterization is wrong).