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How to detrend the prices

PostPosted: Sun Dec 16, 2012 8:42 pm
by igpwira
Hi guys, would you please help me in this matter.

I have a NK model with CPI and commodity prices in level. What I know is Price is detrended by M/A. However I don't have Money in my model. Money is just unit of account and represented by interest rate in my model.
Would you please somebody give me a clue or a reference on this? Many thanks.

Re: How to detrend the prices

PostPosted: Sat Dec 29, 2012 10:20 am
by jpfeifer
You have to express everything in inflation rates and relative prices. See for example
http://ideas.repec.org/p/hhs/rbnkwp/0179.html