What does steady state mean? I am reading a book on business cycle models, and it keep using the word "steady state". It never defined what that actually means.

Obviously it is the idea that some key variables reach constant levels ... but WHAT key variables? It doesn't explain that.

For example, at one point it says "zero inflation steady state". Uhm, sorry, but what? Zero inflation steady state? Of course inflation is zero in steady state ... otherwise price levels would not be constant, hence not in steady state. In fact, if inflation was ever non-zero, we can NOT be in steady state since then price levels must be changing by definition.

So what am I supposed to make of this? What is steady state??
A system is said to be in steady state if certain variables do not change over time (and where "certain variables" depend on the context and ought to have been clearly specified by the writer).

Say we define a system to be in steady state if inflation does not change over time. Then if inflation is constant at 2%, we say that the system is in steady state even though prices are changing. (This is contrary to what you've suggested in your post.)



(The term steady state was, like the term equilibrium, appropriated from the sciences for use in economics. However, although the term equilibrium is often ill-defined, the term steady state is usually amenable to precise definition, provided the writer makes an effort.)