Hi, I am a student in DSGE. I have a problem of log-linezration.
If I write a fomular:
B = Q*K - N (B means bond, Q means the price of K, K means capital, N means net worth)
and
leverage ratio = Q * K / N
Do they all gets:
Q+K-N after log-linezration?
Thank you for any help!
No, you should end up with
B{{\hat B}_t} = QK\left( {{{\hat Q}_t} + {{\hat K}_t}} \right) - N{{\hat N}_t}