hello, i have some doubts regarding the steady state derivation in a model with financial frictions.
why there is a probability distribution (hence a volatility value) regarding the credit sector when sequentially solving for the non-stochastic steady state of the model?
i understand this is a cross-sectional volatility, but still seeing a prob distr in the derivation of a s.s. seems not too intuitive.
someone to comment please?
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steady state with a probability distribution? frictions mod
by euclidean » Sun Sep 30, 2012 11:54 pm
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