Hi all,

For the AR(1) process of shocks in DSGE model, should we put also the constant term into the AR(1) equation, for example:

lnA = (1 - rhoA) + rhoA* lnA(-1) + stdeA*eA (1)

Or it is fine to just use: lnA = rhoA* lnA(-1) + stdeA*eA (2)

The paper I am trying to replicate using the 1st way (with constant term) but I see almost everyone use the 2nd one (without constant term). So I wonder could I just ignore the constant term to proceed, since it more popular and more convenient?

Thanks,