Hi,

stochastic equilibrium in DSGE models What does it mean? How can we show that the equilibrium is stochastic?

Can someone help me?

Without context, it is impossible to tell what you mean.

On page 10 of the article points out that “the existence of stochastic REE where aggregate output is not a constant but instead is equal to the time-varying sentiments Zt”

benhabib2015.pdf (310.7 KB)

For the definition of an REE, please refer to the textbook of Sargent/Ljungqvist. In the paper you refer to, the setup is special, so the REE is a bit unusual but still within the standard definition.