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Dear Johhanes,

In your "A guide to specifying observation equations for estimation of DSGE models" page 58 footnote,
demeaned growth rates observation equation is:
ytobs=log(yt)- log(yt-1)

However, from equation 64 and equation 65,
it seems that ytobs= log(yt)- log(yt-1) + log(ut)- mean (log(yt)- log(yt-1) + log(ut))=log(yt)- log(yt-1) + log(ut)- constant Lamda, since mean (log(yt)- log(yt-1) + log(ut))=constant Lamda in equation 65. This is quite different from the footnote.

So I am wondering if I make any mistake?

Best regards,
Huan

Thanks for pointing this out. You are correct that the demeaned growth rate is missing in the footnote. I have corrected the document.