Does Dynare deal with log-linerized equations directly ?

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Does Dynare deal with log-linerized equations directly ?

Postby james » Tue Apr 14, 2009 6:13 am

Hi, Can you please hlep me ? I am a beginner of Dynare. Now, I am going to replicate one of macroeconomics paper.

Currently, I derived 12 log-linearized FOC equations and 12 variables derived from Dynamic New Keynesian General Euilibrium model. all variables
denotes log deviation; for example, one of 13 variables, x_t = ln [X_t] - ln[ X ], where X is steady state value of X_t.

But, as far as I understand, Dynare seems to deal with not log-linearized model but just linearized model. Thus, I have to specify the steady state
value of X_t, X or some intial values between "initval;" and "end;". But, if so, I am in trouble. I have only log-linearized equations and all coefficients
have already been calibrated. Actually, I am going to find an impulse response function of all 12 variables for a shock. I am stucked. Please, help me.
james
 
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Joined: Tue Apr 14, 2009 5:56 am

Re: Does Dynare deal with log-linerized equations directly ?

Postby MichelJuillard » Sat Apr 18, 2009 10:18 am

If your model is already log-linearized, it is a linear model and Dynare will solve it correctly.
If your variables are the log of ratio of the original variable to its steady state value, then the steady state values of your variables are all zero.

Best

Michel
MichelJuillard
 
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Joined: Thu Nov 18, 2004 10:51 am


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