Steady state is negative

Steady state
1

Hi, if the steady state values of endogenous variables are negative, what is the economic interpretation?

2

Hi,
What type of model are you using? Which variables are negative?

3

my model is New Keynesian and mc, c, y, n, k, z, x and w are negative.

4

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?

5

Are you talking about levels or log-levels? The latter can be negative if the level is between 0 and 1

6

it is about level but I need the economic interpretation not technical

7

If your level is negative, then your model is wrong.

8

like the structure of the model is wrong…assuming there is no mistake in entering the model in dynare?

9

In principle, yes. But usually the model is entered incorrectly (or the parameterization is wrong).

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