About Steady State How to do it

Steady state
1

Hello every one

I have dissertation about DSGE Model, and I need an examples for Steady State, how to do it step by step

2

Hi,

This is explained in any macro dynamic textbook. Basically, you have to remove all the time indices (t, t-1, t+1, …) on the endogenous and exogenous variables in all the equations, and express the endogenous variables as functions of the exogenous variables and parameters. This cannot be done analytically in all models, and often you will have to resort on a numerical solver to obtain the steady state (for given values of the parameters and exogenous variables). This is what Dynare does if you do not provide a closed form expression for the steady state. In small models (basic RBC or NK models), it is possible to obtain an analytical expression for the steady state.

Best,
Stéphane.