zero steady state values

[mgeremew]

Hi All,

I am working on a version of BGG99 model and wrote all the model equations in a linear form. I did not declare initial values, i.e. the model starts from zero initial values. I get all the IRFs but the steady state values for the endogenous variables are all zero. Does this make sense?

Help on this is highly appreciated!

[jpfeifer]

If you linearized your model what you describe is to be expected, because the variables are percentage deviations from steady state, which should be 0 if you are in steady state.