Hello everyone
When steady state values reported, how to must interprete them? How to i know they are true? For example y(gdp) in 4.4 consumption 3.2 labor 0.27 investment 0.24 and k 40.56
Steady state values must be ubder 1 ?
Steady state values indicate mean of the variables in the model.
In log-linear dsge models in dynare steady state values are zero when dynare reports the output results because we have the variables in the form of deviation of mean.
\hat{Y}_{t} = LogY_{t} - Log \overline{Y}
Mean or steady state of \hat{Y}_{t} is zero.
In non-linear dsge models in dynare endogenous variables such as C , I ,Y , … have a steady state value.
There is no need for steady state values to be less than one.
In most cases, the model features constant returns to scale and has TFP normalized to 1. In that case, units are not really interpretable. Only the relative levels need to be consistent.