Stochastic equilibrium

General DSGE Modeling
1

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

2

Can someone help me?

3

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

4

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)

5

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.