Questions about steady-state values. Many literatures have calibrated the steady-state value of labor to about 0.3 to 0.5. I did not calibrate, I directly calibrated the parameter value, I calculated the steady state value of labor is 1.2, may I ask is this reasonable? Whether the steady-state values of labor, output, and consumption we calculate need to be within a reasonable range. If so, what is the approximate range? Thank you very much for your answers.
What does 1.2 even mean? The issue with labor is that the units in the data do not easily map into the model. Most of the time, people solve that issue by normalizing available time in the model to 1 unit and then setting hours worked to roughly 20 to 30 percent of available time (depending on whether you count the full 24 hours or only the non-sleeping hours).
This means that the steady state of labor must be around 0.3 to 0.5. Do the steady-state values of other variables need to be within a certain range
It depends on your model setup, particularly whether you normalized hours worked.
I calculated the steady state directly from the model.
If there is no standardization of labor 1, the steady state does not require labor time of 0.3 to 0.5
No, it doesn’t. But it makes the interpretation a bit harder.
Dear jpfeifer。I still don’t know if labor is going to give us a steady state value of about 1/3. If the labor steady state of the model is not this value does it mean that the model is wrong. What if labor does not represent labor time, but the amount of labor? In this case, do not need to set to 1/3.
Dear jpfeifer。I still don’t know if labor is going to give us a steady state value of about 1/3. If the labor steady state of the model is not this value does it mean that the model is wrong. What if labor does not represent labor time, but the amount of labor? In this case, do not need to set to 1/3.
It is your job as the model builder to make the model setup and the data consistent.