Smets, Frank (contributor); Wouters, Rafael (contributor) - 2004
the model we refer to Smets and
Wouters (2003b) The ^ above a variable denotes log deviations from steady state.
The … that the deviation between the two returns can be captured by a stochastic shock,
whereas the steady-state distortion due …
where
y
k is the steady state capital-output ratio,
y
g the steady-state government spending-output ratio
and g102 is …