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deviation from SS and absolute deviation from 0

PostPosted: Sun Jul 21, 2013 4:21 pm
by marting
Hi everyone,
I have an basic question,
I am writing a model in non-linear form and let Dynare do the log-linearizing job. I am not sure how I should define a variable in "deviation form steady state value" value and another variable in "absolute deviation from 0".
Please help me out here.
thanks.

Re: deviation from SS and absolute deviation from 0

PostPosted: Sun Jul 21, 2013 5:02 pm
by jpfeifer
You mean log-deviations vs. absolute deviations? The answer is: put all variables to be log-linearized (i.e. in percentage deviations from steady state) in exp() to perform a variable substitution, see http://www.dynare.org/phpBB3/viewtopic.php?f=1&t=4682. Variables in absoluted deviations from steady state are not put into exp()