Hi,
I am working on a model where I loglinearized the equations. One of the equations have both steady state and log linearized prices ('P'). I am in the process of coding but I don't know what value I should assign for prices.
Can anyone please assist me?
Thanks.
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Steady-state value for prices
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Steady-state value for prices
by Carol » Thu Nov 01, 2012 11:29 am
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Re: Steady-state value for prices
by jpfeifer » Sun Nov 04, 2012 8:43 am
If you are talking about a New Keynesian model, you have to stationarize everything by getting rid of prices. Express everything either in relative prices or inflation rates.
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Re: Steady-state value for prices
by Carol » Sun Nov 04, 2012 6:19 pm
Thanks for this information Jpfeifer.
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