Hi everyone! I am a student in DSGE,I have a confusion of the log-linearizaton of a formular. The fomulra is: [image] ‘chi_B’ is a parameter, ‘e’ is nominal exchange rate, and ‘b’ is the bond holding by the home country which are obtained from foreign country. The log-linearizaton in dynare co…

See [image] Rounding to zero too quickly Stochastic simulations It’s not a bug. You are approximating a parabola up to first order at its vertex (i.e. in steady state where k=k(-1)). At this point, the slope is 0. Hence, up to first order, there is no change in test. Regar…

A confusion of log-linearizaton

Stochastic simulations

jpfeifer February 19, 2023, 9:29pm 2

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