stationarizing log linear model

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stationarizing log linear model

Postby igpwira » Thu Dec 13, 2012 12:04 pm

Hi,

I am a newbie in Dynare and DSGE model, I have some questions. Would you please help me?

My model is already in terms of log linearized around steady state by hand. I know in this case the steady state is equal to zero.
As the variables are already in its deviation from steady state, which I assume should be stationary. Should I still need to stationarize the model before doing log linearization?

If I assume there is no technological growth as well as no population growth, I do not need to stationarize the model, isn't it?

Many thanks, I am looking forward to the experts explanation.
igpwira
 
Posts: 6
Joined: Wed May 25, 2011 12:31 pm

Re: stationarizing log linear model

Postby zenghaiwei » Sat Dec 15, 2012 3:24 pm

I think if you can do loglinearizeing, it means you can get the stady state. if your model is non-stationary, you can not find the steady state. About the growth rate, please refer to An sungbae and Frank(2007), they introduced how to stationarize your model before log linearizing.
zenghaiwei
 
Posts: 18
Joined: Sun Oct 28, 2012 11:40 am

Re: stationarizing log linear model

Postby igpwira » Sun Dec 16, 2012 8:45 pm

Dear Zheng,
Many thanks for your reply.
igpwira
 
Posts: 6
Joined: Wed May 25, 2011 12:31 pm


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