Numerically finding the steady state of a DSGE model

As the name says, in stochastic simulations the future shocks are unknown and agents have rational expectations, i.e. they know the shock distributions (which then matter for the solution at higher order, because agents may have e.g. precautionary behavior). In contrast, under perfect foresight the shock realizations are known and agents expect no further shock than those specified. Thus, there is no role of stochastics for the model solution.

In terms of output, please see

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